1.Which of the statements below best describes the concept of Enterprise Risk Management?

• An approach that capitalizes on human intervention as processed through real change leaders
• People, systems, and processes working together across the organizations to systematically thin about and manage a wide range of risks that could impede achieving organizational objectives/opportunity
• A process affected by an entity's leaders, management, and other personnel that is designed to identify potential events that may affect the entity, and to manage risk
• Management of a single function of an organization that, upon implementation and testing, is then processed entity wide

2.Mary was getting a ride home in John's new car. On the way, a malfunctioning brake caused an accident and both Mary and John were injured. Which of the following statements is true of this situation?

• Mary can file a strict liability lawsuit against John.
• John can file a negligence lawsuit against the dealership from which he bought the car.
• Mary can file a negligence lawsuit against the dealership that sold John his car.
• Mary can recover damages for her injury under a theory of strict liability against the manufacturer of John's car.

3.How does product disparagement differ from defamation of a nonpublic figure?

• Publication to a third party is required in the disparagement case, but not in the defamation case
• Publication to a third party is required in the defamation case, but not in the disparagement case
• Malicious intent is required for a disparagement case, but is not required in the defamation case
• Malicious intent is required for the defamation case, but not in the disparagement case

4.Assuming that statutory requirements have been met, what is protected under merchant protection statutes?

• Merchants are protected from false imprisonment claims of persons detained on suspicion of shoplifting.
• Merchants are protected from product disparagement claims of their competitors.
• Merchants are protected from negligence claims on their business premises.
• Merchants are protected from the intentional torts of their customers.

5.Bartie's, Inc. sells watercolors and pastels that are marketed as safe for use by children. However, several accounts of lead poisoning were reported in children who used the products. An investigation revealed that the company was knowingly manufacturing colors that contained toxic amounts of the heavy metal. Which of the following torts has Bartie's, Inc. committed?

• Disparagement
• Intentional misrepresentation
• Assault
• Professional malpractice

6.Which best describes assumption of the risk in a negligence case?

• The plaintiff knowingly and willingly subjected herself to a risky activity.
• The defendant gave advance warning to the plaintiff that an injury would occur.
• The plaintiff is more at fault than the defendant in causing the accident.
• The plaintiff was involved in an abnormally dangerous activity.

7.Which of the following is the best statement of the test applied in determining if a defendant's actions were the proximate cause of the plaintiff's injuries?

• Was the injury foreseeable to the plaintiff prior to the injury's occurrence?
• Was it foreseeable to the plaintiff that the defendant would engage in this conduct?
• Was it foreseeable that the defendant was the cause of the plaintiff's injuries given the nature of those injuries?
• Was it foreseeable that the defendant's conduct would lead to the kind of injury that the plaintiff suffered?

8.Which of the following is a key element of successful Enterprise Risk Management?

• Nondisclosure agreements
• Management commitment
• Strong investment strategies
• Legal counsel

9.Select the option which best completes this statement: Enterprise Risk Management is most effective when it is a(n) _________ process.

• informal
• ongoing
• static
• one-time

10.Making false statements about a competitor's products, services, property, or business reputation could make a company liable for

• misappropriation of the right to publicity
• disparagement
• intentional misrepresentation
• tort of appropriation

11.Which of the following is a defect in manufacture?

• Failure to properly design the product
• Failure to include adequate instructions for the product
• Failure to properly test the product
• Failure to properly package the product

12.Gary Govetty is a famous movie star. A tabloid published an interview with his ex-girlfriend in which she falsely claimed that Gary was completely bald and had been wearing a wig for several years. Gary can sue his ex-girlfriend for

• slander
• libel
• invasion of privacy
• disparagement

13The failure to design an automobile that will properly protect the occupants from a person's body striking something inside their automobile is known as the

• failure to design doctrine
• defective design doctrine
• crashworthiness doctrine
• quality control doctrine

14A plaintiff wants to sue a defendant under the tort theory of negligence for his injuries, but the plaintiff knows he was partially at fault for his own injuries. Which of the following is true?

• Because the plaintiff is partly at fault, he will not be able to recover under either comparative or contributory negligence.
• The plaintiff will have to elect whether to sue under comparative or contributory negligence.
• A state whose law applies contributory negligence will not allow the plaintiff to recover if the plaintiff has any fault for his injuries
• If the plaintiff's fault is only 5 percent, his recovery will be the same under either pure or partial comparative negligence.

15.According to the doctrine of ________, the plaintiff is not required to prove that the defendant breached a duty of care.

• comparative negligence
• strict liability
• assumption of risk
• contributive negligence

16.Dorothy purchases a chair that was made by Woode Designs, Inc. While making the chair, the legs were not fixed properly to the base. When Dorothy sits on the chair, it breaks and she is injured. In a strict liability lawsuit, which of the following can Dorothy cite as a defect in the chair?

• Defect in design
• Failure to warn
• Defect in manufacture
• Failure to provide adequate instructions