Which of the Following Is True of the Business Judgment

question 84

Multiple Choice

Which of the following is true of the business judgment rule?

• A)It protects directors and officers from ever being held accountable for bad decisions.
• B)It protects shareholders.
• C)It encourages individuals to serve as directors.
• D)It is an exception to the fiduciary duty of board members.
• E)It applies in insider trading cases.

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Definitions:

Sherman Act

is a foundational antitrust law in the United States that prohibits monopolies and other practices that restrain trade.

Fix Prices

An illegal agreement between parties to sell a product at a set price, limiting competition and violating antitrust laws.

Predatory Pricing

The pricing of a product below cost with the intent to drive competitors out of the market.

Antitrust Violation

An illegal activity that interferes with free competition in the market, involving practices such as monopolization, price fixing, and unlawful mergers.