Beth and Connie do business as Diamond Investments. In acting on the firm's behalf, Beth makes an honest error in overestimating the value of a particular stock purchase. To her firm, Beth is
A) liable for breach of the duty of care.
B) liable for breach of the duty of accounting.
C) liable for breach of the duty of loyalty.
D) not liable.

Question

Beth and Connie do business as Diamond Investments. In acting on the firm's behalf, Beth makes an honest error in overestimating the value of a particular stock purchase. To her firm, Beth is
A) ​liable for breach of the duty of care.
B) ​liable for breach of the duty of accounting.
C) ​liable for breach of the duty of loyalty.
D) ​not liable.

Quizplus · Accepted Answer

Beth made an honest error while acting on behalf of Diamond Investments, therefore she is not liable for any breach of duty. However, the firm may still suffer financial loss from the overestimated value of the stock purchase.

Beth and Connie Do Business as Diamond Investments