Question 1

Which of the following best defines an initial public offering?

Accepted Answer

A)  The issuance of an offering statement to the public prior to purchase. 
B)  The filing of a registration statement by an issuer. 
C)  The disclosure document released for public scrutiny. 
D)  The sale of securities by an issuer to the public. 
A)  The issuance of an offering statement to the public prior to purchase. 
B)  The filing of a registration statement by an issuer. 
C)  The disclosure document released for public scrutiny. 
D)  The sale of securities by an issuer to the public.

Question 2

Which of the following best defines short-swing profits?

Accepted Answer

A)  They are profits that are made by an insider by selling shares of the corporation prior to the public disclosure of unfavorable information. 
B)  They are profits that are made by an insider by personally purchasing shares of the corporation prior to public release of favorable information. 
C)  They are 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)  They are profits that are made by a tippee by personally purchasing shares of the corporation prior to or post public release of favorable information. 
A)  They are profits that are made by an insider by selling shares of the corporation prior to the public disclosure of unfavorable information. 
B)  They are profits that are made by an insider by personally purchasing shares of the corporation prior to public release of favorable information. 
C)  They are 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)  They are profits that are made by a tippee by personally purchasing shares of the corporation prior to or post public release of favorable information.

Question 3

Aiders and abettors are parties who unknowingly assist principal actors in the commission of securities fraud.

Accepted Answer

A) True 
 B)False

Question 4

NASDAQ is the world's largest electronic securities exchange.

Accepted Answer

A) True 
 B)False

Question 5

In 2003,Congress enacted the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Accepted Answer

A) True 
 B)False

Question 6

________ requires securities offered to the public through the use of the mails or any facility of interstate commerce to be registered with the SEC by means of a registration statement and an accompanying prospectus.

Accepted Answer

A)  Section 24 of the Securities Act of 1933 
B)  Section 12 of the Securities Act of 1933 
C)  Section 5 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 5 of the Securities Act of 1933 
D)  SEC Rule 506

Question 7

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 8

A ________ program allows a person who provides information that leads to a successful SEC action in which more than $1 million is recovered to receive 10 percent to 30 percent of the money collected.

Accepted Answer

A)  whistleblower bounty 
B)  security bounty 
C)  surveillance bounty 
D)  defense bounty 
A)  whistleblower bounty 
B)  security bounty 
C)  surveillance bounty 
D)  defense bounty

Question 9

Which of the following is true of a Small Company Offering Registration (SCOR)form?

Accepted Answer

A)  It can only be used for raising more than $1 million through sale of securities. 
B)  Forms are available to both domestic and foreign companies. 
C)  Forms that have been completed act as the offering circular for potential investors. 
D)  Forms have to be completed by the issuee before purchasing securities. 
A)  It can only be used for raising more than $1 million through sale of securities. 
B)  Forms are available to both domestic and foreign companies. 
C)  Forms that have been completed act as the offering circular for potential investors. 
D)  Forms have to be completed by the issuee before purchasing securities.

Question 10

An emerging growth company (EGC)is a class of public company created by the ________ that may issue securities pursuant to specific rules under federal securities laws.

Accepted Answer

A)  Securities Act 
B)  Securities Exchange Act 
C)  JOBS Act 
D)  STOCKS Act 
A)  Securities Act 
B)  Securities Exchange Act 
C)  JOBS Act 
D)  STOCKS Act

Question 11

The electronic data and record system of the Securities and Exchange Commission is known as ________.

Accepted Answer

A)  EDGAR 
B)  NASDAQ 
C)  MICEX 
D)  SPSE 
A)  EDGAR 
B)  NASDAQ 
C)  MICEX 
D)  SPSE

Question 12

A(n)________ is a person who receives material nonpublic information from another person.

Accepted Answer

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

Question 13

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 the 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 the SEC every time the exempt security is transferred. 
D)  Exempt securities cannot be traded publicly.

Question 14

Which of the following is true of the Securities and Exchange Commission (SEC)?

Accepted Answer

A)  It is an international commission that has jurisdiction over all countries. 
B)  It is an agency composed of ten members who are appointed by the president. 
C)  It can bring a civil action to recover monetary damages from violators of securities laws. 
D)  It has no provision for protecting whistleblowers. 
A)  It is an international commission that has jurisdiction over all countries. 
B)  It is an agency composed of ten members who are appointed by the president. 
C)  It can bring a civil action to recover monetary damages from violators of securities laws. 
D)  It has no provision for protecting whistleblowers.

Question 15

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 16

How does the Securities Act of 1933 regulate the initial public offerings of companies going public?

Accepted Answer

The Securities Act of 1933 is a federal

Question 17

Explain the circumstances under which a company triggers public reporting requirements to the Securities and Exchange Commission (SEC).

Accepted Answer

The Securities Exchange Act of 1934 requ

Question 18

Congress enacted the Securities Exchange Act in 2002 to bring more transparency to securities markets and to eliminate conflicts of interests that previously existed in the securities industry.

Accepted Answer

A) True 
 B)False

Question 19

One of the most important purposes of Section 10(b)and Rule 10b-5 is to promote insider trading.

Accepted Answer

A) True 
 B)False

Question 20

Who among the following can be 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.

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

Which of the following best defines an initial public offering?

Which of the following best defines short-swing profits?

Aiders and abettors are parties who unknowingly assist principal actors in the commission of securities fraud.

NASDAQ is the world's largest electronic securities exchange.

In 2003,Congress enacted the Dodd-Frank Wall Street Reform and Consumer Protection Act.

________ requires securities offered to the public through the use of the mails or any facility of interstate commerce to be registered with the SEC by means of a registration statement and an accompanying prospectus.

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

A ________ program allows a person who provides information that leads to a successful SEC action in which more than $1 million is recovered to receive 10 percent to 30 percent of the money collected.

Which of the following is true of a Small Company Offering Registration (SCOR)form?

An emerging growth company (EGC)is a class of public company created by the ________ that may issue securities pursuant to specific rules under federal securities laws.

The electronic data and record system of the Securities and Exchange Commission is known as ________.

A(n)________ is a person who receives material nonpublic information from another person.

Which of the following is true of exempt securities?

Which of the following is true of the Securities and Exchange Commission (SEC)?

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

How does the Securities Act of 1933 regulate the initial public offerings of companies going public?

Explain the circumstances under which a company triggers public reporting requirements to the Securities and Exchange Commission (SEC).

Congress enacted the Securities Exchange Act in 2002 to bring more transparency to securities markets and to eliminate conflicts of interests that previously existed in the securities industry.

One of the most important purposes of Section 10(b)and Rule 10b-5 is to promote insider trading.

Who among the following can be considered a statutory insider?

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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