Question 1

Securities coming under the small offering exemptions ________.

Accepted Answer

A)  cannot be advertised to the public 
B)  can only be sold to accredited investors 
C)  can only be bought by non-accredited investors 
D)  have no resale restrictions imposed on them 
A)  cannot be advertised to the public 
B)  can only be sold to accredited investors 
C)  can only be bought by non-accredited investors 
D)  have no resale restrictions imposed on them

Question 2

How does the Sarbanes-Oxley Act separate the investment banking and securities advice functions of securities firms?

Accepted Answer

Section 501 of the Sarbanes-Oxley Act es

Question 3

A Form 10-K is a(n)________ report that has to be filed by a reporting company as required by the Securities Exchange Act of 1934.

Accepted Answer

A)  weekly 
B)  annual 
C)  monthly 
D)  quarterly 
A)  weekly 
B)  annual 
C)  monthly 
D)  quarterly

Question 4

The federal and state governments have enacted statutes that regulate the issuance and trading of securities that are collectively referred to as ________ law.

Accepted Answer

A)  civil 
B)  real property 
C)  securities 
D)  criminal 
A)  civil 
B)  real property 
C)  securities 
D)  criminal

Question 5

Explain intrastate offering exemption and the requirements that need to be met for it to occur.

Accepted Answer

The Securities Act of 1933 provides an i

Question 6

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

Accepted Answer

A)  non-exemption status 
B)  scienter 
C)  aiding and abetting 
D)  negligent conduct 
A)  non-exemption status 
B)  scienter 
C)  aiding and abetting 
D)  negligent conduct

Question 7

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 8

The Securities Exchange Act of 1934 requires certain companies,called reporting companies,to file periodic reports with the SEC and to their shareholders.

Accepted Answer

A) True 
 B)False

Question 9

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

Question 10

________ refers to a method that allows small companies to raise capital from many small-dollar investors through Web-based platforms.

Accepted Answer

A)  Canvassing 
B)  Hawking 
C)  Crowd funding 
D)  Door-to-door selling 
A)  Canvassing 
B)  Hawking 
C)  Crowd funding 
D)  Door-to-door selling

Question 11

Scissorwire,Inc.sells shares of its stock to the public,with each share valued at $16.After a year,the company incurs a loss and the price of the stock drops to $5.The company reveals that it had deliberately not registered with the SEC before going public and that it has no money to pay the investors.Which of the following scenarios is likely to occur?

Accepted Answer

A)  Scissorwire, Inc. can register with the SEC at any point after the dip in shares. 
B)  The U.S. government can file a criminal lawsuit against Scissorwire, Inc. to seek criminal penalties. 
C)  The investors have been negligent in not verifying registration before purchase of shares and cannot rescind their purchase. 
D)  Scissorwire, Inc. is liable for the violation of the Securities Exchange Act of 1934. 
A)  Scissorwire, Inc. can register with the SEC at any point after the dip in shares. 
B)  The U.S. government can file a criminal lawsuit against Scissorwire, Inc. to seek criminal penalties. 
C)  The investors have been negligent in not verifying registration before purchase of shares and cannot rescind their purchase. 
D)  Scissorwire, Inc. is liable for the violation of the Securities Exchange Act of 1934.

Question 12

Which of the following is true of a Regulation A offering?

Accepted Answer

A)  It imposes resale restrictions on the securities it offers. 
B)  It necessitates the issuers to prepare a registration statement for offers exceeding $100,000. 
C)  It requires the most disclosure of information to investors at the time of the issuance of the securities. 
D)  It mandates that an offering circular be provided to the investors prior to the purchase of securities. 
A)  It imposes resale restrictions on the securities it offers. 
B)  It necessitates the issuers to prepare a registration statement for offers exceeding $100,000. 
C)  It requires the most disclosure of information to investors at the time of the issuance of the securities. 
D)  It mandates that an offering circular be provided to the investors prior to the purchase of securities.

Question 13

The ________ period begins to run when the registration statement is filed with the SEC and continues until the registration statement is declared effective by the SEC.

Accepted Answer

A)  prefiling 
B)  fixing 
C)  waiting 
D)  posteffective 
A)  prefiling 
B)  fixing 
C)  waiting 
D)  posteffective

Question 14

Which of the following is regulated by the Securities Act of 1933?

Accepted Answer

A)  fraud in the purchase and sale of securities 
B)  hedge funds and derivatives 
C)  investor reports 
D)  online issuance of securities 
A)  fraud in the purchase and sale of securities 
B)  hedge funds and derivatives 
C)  investor reports 
D)  online issuance of securities

Question 15

A preliminary prospectus is a written disclosure document that must be submitted to the SEC along with the registration statement.

Accepted Answer

A) True 
 B)False

Question 16

The ________ created a federal administrative agency that is empowered to administer federal securities law.

Accepted Answer

A)  Securities Act of 1933 
B)  Securities Exchange Act of 1934 
C)  Sarbanes-Oxley Act of 2002 
D)  Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 
A)  Securities Act of 1933 
B)  Securities Exchange Act of 1934 
C)  Sarbanes-Oxley Act of 2002 
D)  Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010

Question 17

Registration statements usually become effective ________ after they are filed.

Accepted Answer

A)  20 business days 
B)  15 business days 
C)  90 business days 
D)  10 business days 
A)  20 business days 
B)  15 business days 
C)  90 business days 
D)  10 business days

Question 18

Which of the following has the largest trading volume of any securities exchange in the world?

Accepted Answer

A)  NYSE 
B)  Euronext 
C)  NASDAQ 
D)  London Stock Exchange 
A)  NYSE 
B)  Euronext 
C)  NASDAQ 
D)  London Stock Exchange

Question 19

A(n)________ is a flexible standard for defining a security.

Accepted Answer

A)  red herring prospectus 
B)  investment contract 
C)  certificate of interest 
D)  debenture 
A)  red herring prospectus 
B)  investment contract 
C)  certificate of interest 
D)  debenture

Question 20

An issuer must have ________ to qualify as a well-known seasoned investor.

Accepted Answer

A)  issued $1 billion of securities in the previous three years 
B)  issued $1 million of securities in the previous three years 
C)  at least $900 million of outstanding equity securities owned by nonaffiliate investors 
D)  at least $1 billion of outstanding equity securities owned by nonaffiliate investors 
A)  issued $1 billion of securities in the previous three years 
B)  issued $1 million of securities in the previous three years 
C)  at least $900 million of outstanding equity securities owned by nonaffiliate investors 
D)  at least $1 billion of outstanding equity securities owned by nonaffiliate investors

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

Securities coming under the small offering exemptions ________.

How does the Sarbanes-Oxley Act separate the investment banking and securities advice functions of securities firms?

A Form 10-K is a(n)________ report that has to be filed by a reporting company as required by the Securities Exchange Act of 1934.

The federal and state governments have enacted statutes that regulate the issuance and trading of securities that are collectively referred to as ________ law.

Explain intrastate offering exemption and the requirements that need to be met for it to occur.

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

Which of the following constitutes insider trading?

The Securities Exchange Act of 1934 requires certain companies,called reporting companies,to file periodic reports with the SEC and to their shareholders.

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.

________ refers to a method that allows small companies to raise capital from many small-dollar investors through Web-based platforms.

Which of the following is true of a Regulation A offering?

The ________ period begins to run when the registration statement is filed with the SEC and continues until the registration statement is declared effective by the SEC.

Which of the following is regulated by the Securities Act of 1933?

A preliminary prospectus is a written disclosure document that must be submitted to the SEC along with the registration statement.

The ________ created a federal administrative agency that is empowered to administer federal securities law.

Registration statements usually become effective ________ after they are filed.

Which of the following has the largest trading volume of any securities exchange in the world?

A(n)________ is a flexible standard for defining a security.

An issuer must have ________ to qualify as a well-known seasoned investor.

Legal Heritage and the Digital Age

Constitutional Law for Business and E-commerce

Courts and Jurisdiction

Judicial Alternative Administrative and E-Dispute Resolution

Intentional Torts and Negligence

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 and Lease Contracts

Title to Goods and Risk of Loss

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 and Electronic Financial Transactions

Credit, Real Property Financing, and Secured Transactions

Bankruptcy and Reorganization

Agency law

Small Business, Entrepreneurship, and Partnerships

Corporate Formation and Financing

Corporate Governance and the Sarbanes-Oxley Act

Corporate Acquisitions and Multinational Corporations

Limited Liability Companies and Limited Liability Partnerships

Franchise and Special Forms of Business

Antitrust Law and Unfair Trade Practices

Consumer Safety and Environmental Protection

Labor, Worker Protection, and Immigration Laws

Equal Opportunity in Employment

Personal Property, Bailment, and Insurance

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

Family Law, Wills, and Trusts

Accountants' Duties and Liability

International and World Trade Law

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