Question 1

The Securities and Exchange Commission is an administrative agency composed of five members who are appointed by the ________.

Accepted Answer

president

Question 2

A 10-percent shareholder of an equity security of a reporting company is considered a statutory insider.

Accepted Answer

A) True 
 B)False  True

Question 3

List the securities exempt from registration with the SEC.

Accepted Answer

Certain securities are exempt from registration with the SEC. They include:
a) Securities issued by any government in the United States.
b) Short-term notes and drafts that have a maturity date that does not exceed nine months.
c) Securities issued by nonprofit issuers, such as religious institutions, charitable institutions, and colleges and universities.
d) Securities of financial institutions that are regulated by the appropriate banking authorities.
e) Insurance and annuity contracts issued by insurance companies.
f) Stock dividends and stock splits.
g) Securities issued in a corporate reorganization in which one security is exchanged for another security.

Question 4

Interests or instruments that are expressly mentioned in securities acts are ________ securities.

Accepted Answer

The answer of Interests or instruments that are expressly mentioned...

Question 5

Which of the following best defines short-swing profits?

Accepted Answer

A)  profits that are made by an insider by selling shares of the corporation prior to the public disclosure of unfavorable information 
B)  profits that are made by an insider by personally purchasing shares of the corporation prior to public release of favorable information 
C)  profits that are made by a statutory insider on trades involving equity securities of their corporation that occur within six months of each other 
D)  profits that are made by a tippee by personally purchasing shares of the corporation prior to or post public release of favorable information 
A)  profits that are made by an insider by selling shares of the corporation prior to the public disclosure of unfavorable information 
B)  profits that are made by an insider by personally purchasing shares of the corporation prior to public release of favorable information 
C)  profits that are made by a statutory insider on trades involving equity securities of their corporation that occur within six months of each other 
D)  profits that are made by a tippee by personally purchasing shares of the corporation prior to or post public release of favorable information

Question 6

Drafts that have a maturity date of six months are exempt from registration with the SEC.

Accepted Answer

A) True 
 B)False

Question 7

A(n)________ refers to a document that an issuer of securities files with the SEC that contains required information about the issuer, the securities to be issued, and other relevant information.

Accepted Answer

A)  articles of organization 
B)  operating statement 
C)  registration statement 
D)  certificate of interest 
A)  articles of organization 
B)  operating statement 
C)  registration statement 
D)  certificate of interest

Question 8

The Securities Act of 1933 regulates the purchase and sale of securities online.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is enough to prove a violation of Section 10(b)and Rule 10b-5?

Accepted Answer

A)  nonexemption status 
B)  scienter 
C)  aiding and abetting 
D)  negligent conduct 
A)  nonexemption status 
B)  scienter 
C)  aiding and abetting 
D)  negligent conduct

Question 10

A(n)________ is submitted along with the registration statement to the SEC, and also used as a selling tool to help prospective investors evaluate the financial risk of an investment.

Accepted Answer

A)  organization document 
B)  certificate of interest 
C)  prospectus 
D)  operation agreement 
A)  organization document 
B)  certificate of interest 
C)  prospectus 
D)  operation agreement

Question 11

Small businesses can file ________ with the SEC if they plan on raising $1 million or less from the public issue of securities.

Accepted Answer

A)  Form U-7 
B)  a registration statement 
C)  an operation agreement 
D)  a certificate of interest 
A)  Form U-7 
B)  a registration statement 
C)  an operation agreement 
D)  a certificate of interest

Question 12

A "whistleblower bounty program" allows a person who provides information that leads to a successful SEC action to recover 10 percent to 30 percent of the monetary sanctions over $1 million recovered by the SEC.

Accepted Answer

A) True 
 B)False

Question 13

Regulation A offerings can be sold without registration with the SEC provided that an offering statement is provided prior to the purchase of the securities.

Accepted Answer

A) True 
 B)False

Question 14

________ requires that any profits made by a statutory insider on transactions involving short-swing profits belong to the corporation.

Accepted Answer

A)  Section 5 of the Securities Act of 1933 
B)  Section 12 of the Securities Act of 1933 
C)  Section 16(b) of the Securities Exchange Act of 1934 
D)  SEC Rule 10b5-1 
A)  Section 5 of the Securities Act of 1933 
B)  Section 12 of the Securities Act of 1933 
C)  Section 16(b) of the Securities Exchange Act of 1934 
D)  SEC Rule 10b5-1

Question 15

How does a company sell its shares to the public for the first time? Explain the contents of a registration statement.

Accepted Answer

The issuance of securities by an issuer

Question 16

There are no resale restrictions on securities that come under Regulation A.

Accepted Answer

A) True 
 B)False

Question 17

What is insider trading? How is it regulated in the U.S.A?

Accepted Answer

Insider trading occurs when a company em

Question 18

The issuer is permitted to assert a due diligence defense against the imposition of Section 11 liability.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following constitutes insider trading?

Accepted Answer

A)  an employee makes a profit by personally purchasing shares of the corporation prior to public release of favorable information 
B)  a manager purchases all shares of a corporation available to the public 
C)  a director purchases enough shares of a public company to gain a majority stake in its management 
D)  an employee sells his shares of the company to another employee without notice to the company 
A)  an employee makes a profit by personally purchasing shares of the corporation prior to public release of favorable information 
B)  a manager purchases all shares of a corporation available to the public 
C)  a director purchases enough shares of a public company to gain a majority stake in its management 
D)  an employee sells his shares of the company to another employee without notice to the company

Question 20

An investment contract is a flexible standard for defining a security.

Accepted Answer

A) True 
 B)False

Exam 17: Investor Protection, E-Securities, and Wall Street Reform

The Securities and Exchange Commission is an administrative agency composed of five members who are appointed by the ________.

A 10-percent shareholder of an equity security of a reporting company is considered a statutory insider.

List the securities exempt from registration with the SEC.

Interests or instruments that are expressly mentioned in securities acts are ________ securities.

Which of the following best defines short-swing profits?

Drafts that have a maturity date of six months are exempt from registration with the SEC.

A(n)________ refers to a document that an issuer of securities files with the SEC that contains required information about the issuer, the securities to be issued, and other relevant information.

The Securities Act of 1933 regulates the purchase and sale of securities online.

Which of the following is enough to prove a violation of Section 10(b)and Rule 10b-5?

A(n)________ is submitted along with the registration statement to the SEC, and also used as a selling tool to help prospective investors evaluate the financial risk of an investment.

Small businesses can file ________ with the SEC if they plan on raising $1 million or less from the public issue of securities.

A "whistleblower bounty program" allows a person who provides information that leads to a successful SEC action to recover 10 percent to 30 percent of the monetary sanctions over $1 million recovered by the SEC.

Regulation A offerings can be sold without registration with the SEC provided that an offering statement is provided prior to the purchase of the securities.

________ requires that any profits made by a statutory insider on transactions involving short-swing profits belong to the corporation.

How does a company sell its shares to the public for the first time? Explain the contents of a registration statement.

There are no resale restrictions on securities that come under Regulation A.

What is insider trading? How is it regulated in the U.S.A?

The issuer is permitted to assert a due diligence defense against the imposition of Section 11 liability.

Which of the following constitutes insider trading?

An investment contract is a flexible standard for defining a security.

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