Question 1

Blue-sky laws are state laws that regulate the issuance and trading of securities.

Accepted Answer

A) True 
 B)False

Question 2

________ permits issuers to sell up to $50 million of securities to the public during a 12-month period,pursuant to a simplified registration process.

Accepted Answer

A) SEC Rule 506 
B) Section 12 of the Securities Act of 1933 
C) Section 5 of the Securities Act of 1934 
D) Regulation A 
A) SEC Rule 506 
B) Section 12 of the Securities Act of 1933 
C) Section 5 of the Securities Act of 1934 
D) Regulation A

Question 3

The issuance of securities by an issuer to the public is known as a(n)________.

Accepted Answer

initial pu

Question 4

SEC Rule 506-known as the private placement exemption-allows issuers to raise capital from an unlimited number of ________ without having to register the offering with the SEC.

Accepted Answer

accredited

Question 5

A registration statement need not contain details on how the proceeds from the offering will be used.

Accepted Answer

A) True 
 B)False

Question 6

Section 5 of the Securities Act of 1933 requires an issuer to register its securities with the SEC prior to selling them to the public.

Accepted Answer

A) True 
 B)False

Question 7

The ________ is a federal statute that primarily regulates the issuance of securities by companies and other businesses.

Accepted Answer

Securities

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

An investor who has purchased an unregistered security can rescind their purchase,but not recover damages.

Accepted Answer

A) True 
 B)False

Question 10

According to Regulation A,securities of up to $50 million can only be sold to accredited investors.

Accepted Answer

A) True 
 B)False

Question 11

Of the following,who is considered a Section 16 statutory insider?

Accepted Answer

A) Sharon Muller,an editor who was tipped by her friend to buy shares of KYU Corp. 
B) Robert Morgan,an 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,an 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 12

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 13

An issuer who plans on raising $1 million or less from the public must answer the questions on Form U-7,which doubles as a prospectus and must be made available to prospective investors.

Accepted Answer

A) True 
 B)False

Question 14

During the review of a registration statement,the SEC does not pass judgment on the merits of the securities offered.

Accepted Answer

A) True 
 B)False

Question 15

A small business can file a ________ with the Securities and Exchange Commission (SEC)if it plans on raising $1 million or less in any 12-month period from a public offering of securities.

Accepted Answer

A) Form U-7 
B) registration statement 
C) Form S-1 
D) certificate of interest 
A) Form U-7 
B) registration statement 
C) Form S-1 
D) certificate of interest

Question 16

A 10-percent shareholder of an equity security of a reporting company is considered a statutory insider.

Accepted Answer

A) True 
 B)False

Question 17

The SEC is concerned with regulating issues and trading of securities alone and cannot regulate the activities of securities brokers and advisors.

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

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

Question 19

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) the date of termination of the initial public offering 
D) the 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) the date of termination of the initial public offering 
D) the maximum number of times a share can be sold post-issue

Question 20

A prospectus is a written disclosure provided with the registration statement that helps the SEC to evaluate the financial risk of an investment.

Accepted Answer

A) True 
 B)False

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

Blue-sky laws are state laws that regulate the issuance and trading of securities.

________ permits issuers to sell up to $50 million of securities to the public during a 12-month period,pursuant to a simplified registration process.

The issuance of securities by an issuer to the public is known as a(n)________.

SEC Rule 506-known as the private placement exemption-allows issuers to raise capital from an unlimited number of ________ without having to register the offering with the SEC.

A registration statement need not contain details on how the proceeds from the offering will be used.

Section 5 of the Securities Act of 1933 requires an issuer to register its securities with the SEC prior to selling them to the public.

The ________ is a federal statute that primarily regulates the issuance of securities by companies and other businesses.

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

An investor who has purchased an unregistered security can rescind their purchase,but not recover damages.

According to Regulation A,securities of up to $50 million can only be sold to accredited investors.

Of the following,who is considered a Section 16 statutory insider?

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

An issuer who plans on raising $1 million or less from the public must answer the questions on Form U-7,which doubles as a prospectus and must be made available to prospective investors.

During the review of a registration statement,the SEC does not pass judgment on the merits of the securities offered.

A small business can file a ________ with the Securities and Exchange Commission (SEC)if it plans on raising $1 million or less in any 12-month period from a public offering of securities.

A 10-percent shareholder of an equity security of a reporting company is considered a statutory insider.

The SEC is concerned with regulating issues and trading of securities alone and cannot regulate the activities of securities brokers and advisors.

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

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

A prospectus is a written disclosure provided with the registration statement that helps the SEC to evaluate the financial risk of an investment.

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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