Jed Wimsey, After Auditing the Books of Various Businesses Around

question 166

Multiple Choice

Jed Wimsey, after auditing the books of various businesses around town, was talking to you, his best friend, about certain practices that he thought were improper.Which of the following practices mentioned by Jed would be a breach of fiduciary duty?

• A)An officer of a corporation took advantage of an opportunity he learned about as an officer of the corporation, but took steps to determine that the corporation was not interested in it and received permission to do so from the board of directors.
• B)A shareholder belongs to a group that directly opposes the policy of the corporation with regard to its logging and mining operations.
• C)A director of a corporation profited $25 000 from a contract between the corporation and sellers of some property in which the director had an interest, after the director made full disclosure of his interest to the board of directors and abstained from the vote.
• D)A partner of a firm that sold hospital supplies had, without the knowledge or consent of his partners, started a competing business that he ran from his own home.
• E)The directors failed to declare a dividend for the fourth year in a row.

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Definitions:

Alpha Decay

The radioactive decay process in which an unstable atom fissions, releasing a positively charged particle with two protons and two neutrons.

Radioactive Decay

The method through which an unstable atomic nucleus releases energy through the emission of radiation.

Confining Pressure

The type of pressure that results when the force imposed on a rock is the same amount from all directions.

Lattice Vibration

The collective oscillations of atoms in a crystalline solid, contributing to the material's thermal and electrical properties.