Question 1

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 each 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 each time the exempt security is transferred. 
D) Exempt securities cannot be traded publicly. B

Question 2

In order to be found guilty for violation of Rule 10b-5,intentional conduct (scienter)must be proven.

Accepted Answer

A) True 
 B)False  True

Question 3

Utilities Inc.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.Identify the issuer in this scenario.

Accepted Answer

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

Question 4

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

Accepted Answer

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

Question 5

Interests in oil,gas,and mineral rights are considered statutorily defined securities.

Accepted Answer

A) True 
 B)False

Question 6

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 7

The ________ is a registration exemption which states that securities transactions not made by an issuer,an underwriter,or a dealer do not have to be registered with the Securities and Exchange Commission (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 8

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

Accepted Answer

A) True 
 B)False

Question 9

List the securities exempt from registration with the Securities and Exchange Commission (SEC).

Accepted Answer

Certain securities are exempt from regis

Question 10

________ 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 11

A(n)________ issued by the Securities and Exchange Commission (SEC)indicates that a defendant agrees not to violate securities laws in the future but does not admit to having violated securities laws in the past.

Accepted Answer

The answer of A(n)________ issued by the Securities and Exchange...

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A) A SCOR form can only be used for raising more than $1 million through the sale of securities. 
B) A SCOR form can be used by both domestic and foreign companies. 
C) A SCOR form doubles as a prospectus for potential investors. 
D) A SCOR form must be completed by the issuee before purchasing securities. 
A) A SCOR form can only be used for raising more than $1 million through the sale of securities. 
B) A SCOR form can be used by both domestic and foreign companies. 
C) A SCOR form doubles as a prospectus for potential investors. 
D) A SCOR form must be completed by the issuee before purchasing securities.

Question 14

Insider trading in the purchase and sale of securities in the aftermarkets is prohibited by the ________.

Accepted Answer

Securities

Question 15

Continuous reporting to investors and the SEC is a requirement imposed by the Securities Act of 1933.

Accepted Answer

A) True 
 B)False

Question 16

________ is a federal statute that permits the Securities and Exchange Commission (SEC)to obtain a civil penalty of up to three times the illegal benefits received from insider trading.

Accepted Answer

A) The Securities Act of 1933 
B) The Securities Exchange Act of 1934 
C) The Insider Trading Sanctions Act 
D) SEC Rule 506 
A) The Securities Act of 1933 
B) The Securities Exchange Act of 1934 
C) The Insider Trading Sanctions Act 
D) SEC Rule 506

Question 17

A company that is issuing securities to the public must file a written ________ with the Securities and Exchange Commission (SEC).

Accepted Answer

registrati

Question 18

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 19

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

Accepted Answer

The answer of The Securities and Exchange Commission (SEC)is an...

Question 20

Courts apply the ________ in determining whether an arrangement is an investment contract.

Accepted Answer

A) Howey test 
B) misappropriation theory 
C) strict scrutiny test 
D) intermediate scrutiny test 
A) Howey test 
B) misappropriation theory 
C) strict scrutiny test 
D) intermediate scrutiny test

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

Which of the following is true of exempt securities?

In order to be found guilty for violation of Rule 10b-5,intentional conduct (scienter)must be proven.

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

Interests in oil,gas,and mineral rights are considered statutorily defined securities.

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.

The ________ is a registration exemption which states that securities transactions not made by an issuer,an underwriter,or a dealer do not have to be registered with the Securities and Exchange Commission (SEC).

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

List the securities exempt from registration with the Securities and Exchange Commission (SEC).

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

A(n)________ issued by the Securities and Exchange Commission (SEC)indicates that a defendant agrees not to violate securities laws in the future but does not admit to having violated securities laws in the past.

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

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

Insider trading in the purchase and sale of securities in the aftermarkets is prohibited by the ________.

Continuous reporting to investors and the SEC is a requirement imposed by the Securities Act of 1933.

________ is a federal statute that permits the Securities and Exchange Commission (SEC)to obtain a civil penalty of up to three times the illegal benefits received from insider trading.

A company that is issuing securities to the public must file a written ________ with the Securities and Exchange Commission (SEC).

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

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

Courts apply the ________ in determining whether an arrangement is an investment contract.

Legal Heritage and the Digital Age

Ethics and Social Responsibility of Business

Courts, Jurisdiction, and Administrative Agencies

Alternative, Judicial, and E-Dispute Resolution

Constitutional Law for Business and E-Commerce

Torts and Strict Liability

Cyber Law and Cyber Crimes

Intellectual Property and Cyber Piracy

Formation and Requirements of Contracts

Performance and Breach of Contracts

Digital Law and E-Commerce

UCC Sales Contracts, Leases, and Warranties

Credit, Secured Transactions, and Bankruptcy

Small Business, General Partnerships, and Limited Partnerships

Limited Liability Companies, Limited Liability Partnerships, and Special Forms of Business

Corporations and Corporate Governance

Agency Law

Equal Opportunity in Employment

Employment Law and Worker Protection

Labor Law and Immigration Law

Antitrust Law and Unfair Trade Practices

Consumer Protection

Environmental Protection

Real Property and Land Use Regulation

International and World Trade Law

Accountants' Duties and Liability

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