For the Business Judgment Rule to Apply

question 35

Multiple Choice

For the business judgment rule to apply:

• A) there must be a conflict of interest.
• B) the director must exercise extraordinary care.
• C) the director must act in the best interests of the corporation.
• D) All of the above.

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Definitions:

Individual Choices

Decisions made by individuals based on their preferences and constraints.

Economic Incentives

Factors, often financial or material, that motivate individuals or businesses to pursue certain actions or behaviors.

Exploiting Opportunities

The act of taking strategic actions to capitalize on favorable conditions or circumstances to achieve desired outcomes.

Specialization

A process in economics where individuals or entities focus on the production of a limited scope of goods or services to gain greater efficiencies.