Question 1

Stock dividends and stock splits must be registered with the SEC.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is not one of the functions of the Securities and Exchange Commission?

Accepted Answer

A)  adopting rules to advance the purposes of securities laws 
B)  providing government-backed insurance to purchasers of securities 
C)  bringing enforcement actions against suspected violators of securities laws 
D)  regulating securities brokers and advisors 
E)  registering securities brokers and advisors 
A)  adopting rules to advance the purposes of securities laws 
B)  providing government-backed insurance to purchasers of securities 
C)  bringing enforcement actions against suspected violators of securities laws 
D)  regulating securities brokers and advisors 
E)  registering securities brokers and advisors

Question 3

A(n)________ contract is any contract whereby a party contributes money or other consideration in a common enterprise and expects to make a profit from the significant efforts of others.

Accepted Answer

A)  subscription 
B)  investment 
C)  securities 
D)  debenture 
E)  warrant 
A)  subscription 
B)  investment 
C)  securities 
D)  debenture 
E)  warrant

Question 4

When an insider discloses material insider information to a non-insider tippee,the tipper is liable for:

Accepted Answer

A)  the tipper's own trading only. 
B)  the tippee's profits, but not the profits made by any remote tippees. 
C)  the profits made by the immediate tippee, as well as the profits made by any remote tippees. 
D)  the profits made by all traders during the period before the information becomes public. 
E)  only the pay the tipper received for providing the information to the tippee. 
A)  the tipper's own trading only. 
B)  the tippee's profits, but not the profits made by any remote tippees. 
C)  the profits made by the immediate tippee, as well as the profits made by any remote tippees. 
D)  the profits made by all traders during the period before the information becomes public. 
E)  only the pay the tipper received for providing the information to the tippee.

Question 5

What are securities laws passed by states typically called?

Accepted Answer

A)  "blue-sky" laws 
B)  "red-sky" laws 
C)  "dark-sky" laws 
D)  prohibitive laws 
E)  regulatory laws 
A)  "blue-sky" laws 
B)  "red-sky" laws 
C)  "dark-sky" laws 
D)  prohibitive laws 
E)  regulatory laws

Question 6

The issuer is permitted to "condition" the market during the "pre-filing" period.

Accepted Answer

A) True 
 B)False

Question 7

Under the Securities Act of 1933,securities that have been issued under the "intrastate offering" exemption cannot be resold to a nonresident of the state for two years following the initial sale.

Accepted Answer

A) True 
 B)False

Question 8

The ________ created the ________ and empowered it to administer federal securities laws.

Accepted Answer

A)  Securities Act of 1933; Interstate Commerce Commission 
B)  Securities Act of 1934; Interstate Commerce Commission 
C)  Securities Exchange Act of 1933; Securities and Exchange Commission 
D)  Securities Exchange Act of 1934; Securities and Exchange Commission 
E)  Securities Exchange Act of 1935; Securities and Exchange Commission 
A)  Securities Act of 1933; Interstate Commerce Commission 
B)  Securities Act of 1934; Interstate Commerce Commission 
C)  Securities Exchange Act of 1933; Securities and Exchange Commission 
D)  Securities Exchange Act of 1934; Securities and Exchange Commission 
E)  Securities Exchange Act of 1935; Securities and Exchange Commission

Question 9

State securities laws are often referred to as "blue-sky" laws.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following individuals would not be considered an officer regarding Rule 16 enforcement?

Accepted Answer

A)  an executive officer who participates in policy-making functions 
B)  an executive officer who does not participate in policy-making functions 
C)  a chief executive officer 
D)  a vice president in charge of business units 
E)  a chief financial officer 
A)  an executive officer who participates in policy-making functions 
B)  an executive officer who does not participate in policy-making functions 
C)  a chief executive officer 
D)  a vice president in charge of business units 
E)  a chief financial officer

Question 11

Securities of a financial institution must register with the SEC,even if the financial institution is regulated by the appropriate banking authorities.

Accepted Answer

A) True 
 B)False

Question 12

A consent order is:

Accepted Answer

A)  an agreement whereby a defendant agrees not to violate securities laws in the future, but does not admit to having violated securities laws in the past. 
B)  an agreement that results in the federal district court granting an injunction. 
C)  a request of the court for ancillary relief. 
D)  an agreement to sell securities at a future date at the current price on the day the agreement was reached. 
E)  a plea bargain agreement with the United States Department of Justice to provide information in exchange for a reduced sentence. 
A)  an agreement whereby a defendant agrees not to violate securities laws in the future, but does not admit to having violated securities laws in the past. 
B)  an agreement that results in the federal district court granting an injunction. 
C)  a request of the court for ancillary relief. 
D)  an agreement to sell securities at a future date at the current price on the day the agreement was reached. 
E)  a plea bargain agreement with the United States Department of Justice to provide information in exchange for a reduced sentence.

Question 13

Under the Securities Act of 1933,at the latest,a final prospectus must be provided to a purchaser of securities by the time the sale is closed.

Accepted Answer

A) True 
 B)False

Question 14

No more than ________ non-accredited investors may purchase securities pursuant to a "private placement" exemption.

Accepted Answer

A)  fifteen 
B)  twenty-five 
C)  thirty-five 
D)  forty-five 
E)  There is no prescribed limit, as long as each investor qualifies. 
A)  fifteen 
B)  twenty-five 
C)  thirty-five 
D)  forty-five 
E)  There is no prescribed limit, as long as each investor qualifies.

Question 15

With respect to "Section 11" actions under the Securities Act of 1933 and Rule 10b-5 actions under the Securities Exchange Act of 1934,intent must be proven:

Accepted Answer

A)  in both Section 11 and Rule 10b-5 actions. 
B)  in Section 11 actions, but not in Rule 10b-5 actions. 
C)  in Rule 10b-5 actions, but not in Section 11 actions. 
D)  in neither Section 11 actions, nor in Rule 10b-5 actions. 
E)  in both Section 11 and Rule 10b-5 actions, but only if a possible jail sentence is involved. 
A)  in both Section 11 and Rule 10b-5 actions. 
B)  in Section 11 actions, but not in Rule 10b-5 actions. 
C)  in Rule 10b-5 actions, but not in Section 11 actions. 
D)  in neither Section 11 actions, nor in Rule 10b-5 actions. 
E)  in both Section 11 and Rule 10b-5 actions, but only if a possible jail sentence is involved.

Question 16

Rule 10b-5 of the Securities Exchange Act of 1934 applies to:

Accepted Answer

A)  the issuance of securities covered by a registration statement. 
B)  the trading of securities, if the trading is performed on a national exchange. 
C)  only transactions connected with a merger or consolidation. 
D)  any transfer of securities. 
E)  only transfers made in violation of a transfer restriction. 
A)  the issuance of securities covered by a registration statement. 
B)  the trading of securities, if the trading is performed on a national exchange. 
C)  only transactions connected with a merger or consolidation. 
D)  any transfer of securities. 
E)  only transfers made in violation of a transfer restriction.

Question 17

Which of the following parties is not an accredited investor for purposes of the "private placement" exemption under the Securities Act of 1933?

Accepted Answer

A)  a person with a net worth of at least $1,000,000 
B)  a corporation or partnership with total assets in excess of $5,000,000 
C)  a director of a corporation that is the issuer 
D)  a person who had an income of at least $200,000 in the most recent year, but who has no expectation of earning $200,000 in the current year 
E)  a registered investment company 
A)  a person with a net worth of at least $1,000,000 
B)  a corporation or partnership with total assets in excess of $5,000,000 
C)  a director of a corporation that is the issuer 
D)  a person who had an income of at least $200,000 in the most recent year, but who has no expectation of earning $200,000 in the current year 
E)  a registered investment company

Question 18

A subscription contract is any contract whereby an investor invests money or other consideration in a common enterprise and expects to make a profit from the significant efforts of others.

Accepted Answer

A) True 
 B)False

Question 19

When selling securities under "Regulation A:"

Accepted Answer

A)  issuers must limit the sales of the securities to accredited investors. 
B)  issuers cannot sell more than $5,000,000 of securities in one year. 
C)  all issuers must provide an offering statement. 
D)  sales are limited to twenty-five unaccredited investors. 
E)  there are restrictions on the resale of the securities. 
A)  issuers must limit the sales of the securities to accredited investors. 
B)  issuers cannot sell more than $5,000,000 of securities in one year. 
C)  all issuers must provide an offering statement. 
D)  sales are limited to twenty-five unaccredited investors. 
E)  there are restrictions on the resale of the securities.

Question 20

Preferred stock,bonds,and debentures are examples of ________.

Accepted Answer

A)  common securities 
B)  preferred securities 
C)  statutorily-defined securities 
D)  investment contracts 
E)  warrants 
A)  common securities 
B)  preferred securities 
C)  statutorily-defined securities 
D)  investment contracts 
E)  warrants

Exam 32: Investor Protection,E-Securities Transactions,and Wall Street Reform

Stock dividends and stock splits must be registered with the SEC.

Which of the following is not one of the functions of the Securities and Exchange Commission?

A(n)________ contract is any contract whereby a party contributes money or other consideration in a common enterprise and expects to make a profit from the significant efforts of others.

When an insider discloses material insider information to a non-insider tippee,the tipper is liable for:

What are securities laws passed by states typically called?

The issuer is permitted to "condition" the market during the "pre-filing" period.

Under the Securities Act of 1933,securities that have been issued under the "intrastate offering" exemption cannot be resold to a nonresident of the state for two years following the initial sale.

The ________ created the ________ and empowered it to administer federal securities laws.

State securities laws are often referred to as "blue-sky" laws.

Which of the following individuals would not be considered an officer regarding Rule 16 enforcement?

Securities of a financial institution must register with the SEC,even if the financial institution is regulated by the appropriate banking authorities.

A consent order is:

Under the Securities Act of 1933,at the latest,a final prospectus must be provided to a purchaser of securities by the time the sale is closed.

No more than ________ non-accredited investors may purchase securities pursuant to a "private placement" exemption.

With respect to "Section 11" actions under the Securities Act of 1933 and Rule 10b-5 actions under the Securities Exchange Act of 1934,intent must be proven:

Rule 10b-5 of the Securities Exchange Act of 1934 applies to:

Which of the following parties is not an accredited investor for purposes of the "private placement" exemption under the Securities Act of 1933?

A subscription contract is any contract whereby an investor invests money or other consideration in a common enterprise and expects to make a profit from the significant efforts of others.

When selling securities under "Regulation A:"

Preferred stock,bonds,and debentures are examples of ________.

Legal Heritage and the Information Age

Constitutional Law for Business and E-Commerce

Courts and Jurisdiction

Judicial, Alternative, Administrative, and E-Dispute Resolution

Torts and Strict Liability

Criminal Law and Cyber Crimes

Intellectual Property and Cyber Piracy

Ethics and Social Responsibility of Business

Nature of Traditional and E-Contracts

Agreement and Consideration

Capacity and Legality

Genuineness of Assent and Statute of Frauds

Third-Party Rights and Discharge

Breach of Contract and Remedies

Digital Law and E-Commerce

Formation of Sales, Lease, and E-Contracts

Performance of Sales, Leases and E-Contracts

Remedies for Breach of Sales and Lease Contracts

Warranties and Product Liability

Creation and Transfer of Negotiable Instruments

Holder in Due Course and Liability of Parties

Banking System, E-Money, and Financial Reform

Credit and Secured Transactions

Bankruptcy and Reorganization

Agency Law

Small Business, Entrepreneurship, and Partnerships

Corporate Formation and Financing

Corporate Governance and Sarbanes-Oxley Act

Corporate Acquisitions and Multinational Corporations

Limited Liability Company and Limited Liability Partnership

Franchise and Special Forms of Business

Antitrust Law

Consumer Safety, Consumer Financial Protection, and Environmental Protection

Labor, Worker Protection, Employment, and Immigration Law

Equal Opportunity in Employment

Personal Property, Bailment, and Insurance

Real Property, Landlord-Tenant Law, and Land Use Regulation

Family Law, Wills, and Trusts

Accountants' Liability

International and World Trade Law

Filters

The created the and empowered it to administer federal securities laws.