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1. Real estate transactions can fail for a number of reasons, including clouds on title, financing, zoning and environmental issues.

True False

2. The prearranged sale risk for a no-negotiation circumstance is near zero.

True False

3. A buyer waiting in the wings raises the risk level to a high level.

True False

4. With a contingent escrow agreement, the prearranged sale risk is extremely high.

True False

5. In the negotiation phase for the sale of a C corporation, there is little risk of a prearranged sale.

True False

6. A letter of intent for the purchase of a C corporation presents a prearranged sale risk.

True False

7. When the board of directors approves the sale, a binding sale agreement is created.

True False

8. Even a vote of approval by the board of directors of a widely held C corporation will not create a binding agreement.

True False

9. The vote of at least 50% of the shareholders creates a binding sale.

True False

10. The risk of a prearranged sale must be assessed by donor's counsel.

True False

Basic Quiz - 5.5.4 Risk Disclosure