1. Ernie is a director of Five-Star Properties, Inc. Ernie is a property appraiser. Five-Star makes several purchases in which it pays too much. Ernie approves all the transactions without evaluating them. He is most likely liable for breach of
a. the business judgement rule
b. none of the choices
c. the duty of care
d. the duty of loyalty
2. Roy, a director of Service & Sales Corporation, does not attend a board meeting for three years. During that time, Terry, the firm’s president, makes improper loans that cost the company $10 million. Roy is most likely liable for breach of
a. the business judgement rule
b. none of the choices
c. the duty of care
d. the duty of loyalty