Question 1

The Dodd-Frank Wall Street Reform and Consumer Protection Act imposes regulations on ________.

Accepted Answer

A) hedge funds and derivatives 
B) stock dividends and splits 
C) interests in realty 
D) restricted securities 
A) hedge funds and derivatives 
B) stock dividends and splits 
C) interests in realty 
D) restricted securities

Question 2

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 3

________ is a provision of the Securities Act of 1933 that imposes civil liability on persons who intentionally defraud investors by making misrepresentations or omissions of material facts in the registration statement.

Accepted Answer

A) Section 24 of the Securities Act of 1933 
B) Section 12 of the Securities Act of 1933 
C) Section 11 of the Securities Act of 1933 
D) SEC Rule 506 
A) Section 24 of the Securities Act of 1933 
B) Section 12 of the Securities Act of 1933 
C) Section 11 of the Securities Act of 1933 
D) SEC Rule 506

Question 4

A(n)________ is an exemption from registration which states that securities transactions not made by an issuer, an underwriter, or a dealer do not have to be registered with the SEC.

Accepted Answer

A) intrastate offering exemption 
B) private placement exemption 
C) regulation A offering 
D) nonissuer exemption 
A) intrastate offering exemption 
B) private placement exemption 
C) regulation A offering 
D) nonissuer exemption

Question 5

How does Section 16(b)of the Securities Exchange Act of 1934 protect the interests of a corporation? Explain with an example.

Accepted Answer

Section 16(b)of the Securities Exchange

Question 6

Interests in oil, gas, and mineral rights are classified as ________.

Accepted Answer

A) statutorily defined securities 
B) implicit securities 
C) investment contracts 
D) common securities 
A) statutorily defined securities 
B) implicit securities 
C) investment contracts 
D) common securities

Question 7

Which of the following is true of exempt securities?

Accepted Answer

A) Only the federal government can issue exempt securities. 
B) Once a security is exempt, it is exempt forever. 
C) An exemption notice must be filed with SEC every time the exempt security is transferred. 
D) Exempt securities cannot be traded publicly. 
A) Only the federal government can issue exempt securities. 
B) Once a security is exempt, it is exempt forever. 
C) An exemption notice must be filed with SEC every time the exempt security is transferred. 
D) Exempt securities cannot be traded publicly.

Question 8

Which of the following must be included in the registration statement?

Accepted Answer

A) judgments passed by the SEC on the merits of the securities offered 
B) how proceeds from the offering will be used 
C) date of termination of the initial public offering 
D) maximum number of times a share can be sold post issue 
A) judgments passed by the SEC on the merits of the securities offered 
B) how proceeds from the offering will be used 
C) date of termination of the initial public offering 
D) maximum number of times a share can be sold post issue

Question 9

Which of the following is true of Section 24 of the Securities Act of 1933?

Accepted Answer

A) It imposes civil liability on any person who violates the provisions of Section 5 of the act. 
B) It imposes criminal liability on any person who willfully violates the 1933 act or the rules or regulations adopted. 
C) It imposes civil liability on persons who intentionally defraud investors by making misrepresentations of material facts in the registration statement. 
D) It exclusively regulates the sale of securities online. 
A) It imposes civil liability on any person who violates the provisions of Section 5 of the act. 
B) It imposes criminal liability on any person who willfully violates the 1933 act or the rules or regulations adopted. 
C) It imposes civil liability on persons who intentionally defraud investors by making misrepresentations of material facts in the registration statement. 
D) It exclusively regulates the sale of securities online.

Question 10

Who among the following is considered a statutory insider?

Accepted Answer

A) Sharon Muller, an editor who was tipped by her friend to buy shares of KYU Corp. 
B) Robert Morgan, a government employee who owns ten percent of all equity security of KYU Corp. 
C) Jim Downey, a graphics engineer who quit KYU Corp.after five years of service 
D) Kate Harris, a legal consultant to KYU Corp. 
A) Sharon Muller, an editor who was tipped by her friend to buy shares of KYU Corp. 
B) Robert Morgan, a government employee who owns ten percent of all equity security of KYU Corp. 
C) Jim Downey, a graphics engineer who quit KYU Corp.after five years of service 
D) Kate Harris, a legal consultant to KYU Corp.

Question 11

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 12

A(n)________ is a person who discloses material nonpublic information to another person.

Accepted Answer

A) issuer 
B) tippee 
C) grantor 
D) tipper 
A) issuer 
B) tippee 
C) grantor 
D) tipper

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

A tipper cannot be held liable for the profits made by the tippee.

Accepted Answer

A) True 
 B)False

Question 15

Utilities Ltd.decided to go public by an initial public offering.It sold securities, some of which were bought by James Jefferson.Six months later, Mr.Jefferson sold the Utilities shares he had purchased to Martha Graham and Mark Franco.Two years later, Mr.Jefferson bought back the Utilities shares from Ms.Graham and Mr.Franco and made a profit out of both transactions.Who is the issuer in this scenario?

Accepted Answer

A) Utilities Ltd. 
B) James Jefferson 
C) Martha Graham 
D) Mark Franco 
A) Utilities Ltd. 
B) James Jefferson 
C) Martha Graham 
D) Mark Franco

Question 16

EDGAR is the world's largest electronic securities exchange.

Accepted Answer

A) True 
 B)False

Question 17

The ________ coordinates state securities laws with federal securities laws.

Accepted Answer

A) Insider Trading Sanctions Act 
B) Securities Act of 1934 
C) Securities Act of 1933 
D) Uniform Securities Act 
A) Insider Trading Sanctions Act 
B) Securities Act of 1934 
C) Securities Act of 1933 
D) Uniform Securities Act

Question 18

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 19

The Securities Act of 1933 is a federal statute that primarily regulates the issue of securities by companies and other businesses.

Accepted Answer

A) True 
 B)False

Question 20

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

Accepted Answer

A) True 
 B)False

Exam 41: Investor Protection, E-Securities, and Wall Street Reform

The Dodd-Frank Wall Street Reform and Consumer Protection Act imposes regulations on ________.

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.

________ is a provision of the Securities Act of 1933 that imposes civil liability on persons who intentionally defraud investors by making misrepresentations or omissions of material facts in the registration statement.

A(n)________ is an exemption from registration which states that securities transactions not made by an issuer, an underwriter, or a dealer do not have to be registered with the SEC.

How does Section 16(b)of the Securities Exchange Act of 1934 protect the interests of a corporation? Explain with an example.

Interests in oil, gas, and mineral rights are classified as ________.

Which of the following is true of exempt securities?

Which of the following must be included in the registration statement?

Which of the following is true of Section 24 of the Securities Act of 1933?

Who among the following is considered a statutory insider?

Which of the following constitutes insider trading?

A(n)________ is a person who discloses material nonpublic information to another person.

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

A tipper cannot be held liable for the profits made by the tippee.

EDGAR is the world's largest electronic securities exchange.

The ________ coordinates state securities laws with federal securities laws.

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

The Securities Act of 1933 is a federal statute that primarily regulates the issue of securities by companies and other businesses.

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

Legal Heritage and the Digital Age

Courts and Jurisdiction

Judicial,Alternative,and E-Dispute Resolution

Constitutional Law for Business and E-Commerce

Intentional Torts and Negligence

Product and Strict Liability

Intellectual Property and Cyber Piracy

Criminal Law and Cyber Crimes

Nature of Traditional and E-Contracts

Agreement

Consideration and Promissory Estoppel

Capacity and Legality

Genuineness of Assent and Undue Influence

Statute of Frauds and Equitable Exceptions

Third-Party Rights and Discharge

Remedies for Breach of Traditional and E-Contracts

E-Commerce and Digital Law

Formation of Sales and Lease Contracts

Title to Goods and Risk of Loss

Remedies for Breach of Sales and Lease Contracts

Warranties

Creation of Negotiable Instruments

Holder in Due Course and Transferability

Liability, Defenses, and Discharge

Banks, E-Money, and Financial Reform

Credit,Mortgages,and Debtor's Rights

Secured Transactions and E-Filing

Bankruptcy and Reorganization

Agency Formation and Termination

Liability of Principals, Agents, and Independent Contractors

Employment, Worker Protection, and Immigration Law

Labor Law and Collective Bargaining

Equal Opportunity in Employment

Small Business, Entrepreneurship, and General Partnerships

Limited Partnerships and Special Partnerships

Corporate Formation and Financing

Corporate Governance and the Sarbanes-Oxley Act

Corporate Acquisitions and Multinational Corporations

Limited Liability Companies and Limited Liability Partnerships

Franchises and Special Forms of Businesses

Ethics and Social Responsibility of Business

Administrative Law and Regulatory Agencies

Consumer Protection and Product Safety

Environmental Protection

Antitrust Law and Unfair Trade Practices

Personal Property and Bailment

Real Property

Landlord-Tenant Law and Land Use Regulation

Insurance

Accountants' Duties and Liability

Wills Trusts and Estates

Family Law

International and World Trade Law

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