QUESTION 23 This U.S. legal theory was created by case law in the 20th Century a

Question

QUESTION 23

This U.S. legal theory was created by case law in the 20th Century and shifts the cost of injury to the manufacturer or seller who produces or sells a product with a defect that causes an injury.

a.Negligence

b.Breach of contract

c.Strict product liability

d.The Consumer Product Safety Act

QUESTION 24

"Churning" refers to this sales practice:

a.Turning cream into butter

b.Recommending unnecessary transactions in order to earn a transaction fee

c.Selling useless products

d.Selling harmful products

QUESTION 25

The Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank) includes this provision:

a.Additional protection for whistle-blowers who report misconduct by financial institutions

b.Punitive damamges for misconduct that is malicious or shows reckless disregard for consumer's rights

c.An independent audit committee to review public corporation financial reports

d.Penalities for insider trading

Explanation / Answer

1.C) Strict product liability

Product liability treats everone in the supply chain of the defective product from the manufacturer to the shopkeeper as liable for the quality of the product nd for the injury it caused after being sold.The plaintiff does mot have to prove that the product was reasonably dangerous, instead the defendants have to prove thst they were not at fault.

2. B)

Churning is an unethical practice, where the broker engages in excessive selling and buying of securities or policies on behalf of the customer or persuades them to change their investments frequently without valid reason.All this benefits the broker as they get commisions on each new transaction.

3.A) The Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank) includes additional protection for whistle-blowers who report misconduct by financial institutions

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