Question 1

What is insider trading? How is it regulated in the United States?

Accepted Answer

Insider trading occurs when a company em

Question 2

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 3

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 4

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 5

Interests or instruments that are expressly mentioned in securities acts are known as ________.

Accepted Answer

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

Question 6

Section 10(b)of the Securities Exchange Act prohibits the use of manipulative and deceptive devices in contravention of the rules and regulations prescribed by the SEC.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is true of registration statements?

Accepted Answer

A) They must be accompanied by financial statements certified by certified public accountants. 
B) Once submitted, they cannot be amended. 
C) The SEC judges the merits of the securities based on the registration statement. 
D) They need not reveal how a company plans on using the proceeds from the offering. 
A) They must be accompanied by financial statements certified by certified public accountants. 
B) Once submitted, they cannot be amended. 
C) The SEC judges the merits of the securities based on the registration statement. 
D) They need not reveal how a company plans on using the proceeds from the offering.

Question 8

Electronic Data Gathering,Analysis,and Retrieval system (EDGA
R)is the world's largest electronic securities exchange.

Accepted Answer

A) True 
 B)False

Question 9

Civil liability under Section 11 is imposed on issuers who are negligent in not discovering the fraud in their security offerings.

Accepted Answer

A) True 
 B)False

Question 10

________ 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 11

Investors who purchased unregistered securities can rescind their purchase but not recover damages.

Accepted Answer

A) True 
 B)False

Question 12

The ________ imposes liability under Section 10(b)and Rule 10b-5 on an outsider who misappropriates information about a company,in violation of his or her fiduciary duty,and then trades in the securities of that company.

Accepted Answer

A) Insider Trading Sanctions Act 
B) Sarbanes-Oxley Act 
C) tort of appropriation 
D) misappropriation theory 
A) Insider Trading Sanctions Act 
B) Sarbanes-Oxley Act 
C) tort of appropriation 
D) misappropriation theory

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

Distinguish between nonissuer exemption,intrastate offering exemption,and private placement exemption.

Accepted Answer

Nonissuer exemption refers to an exempti

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

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

Accepted Answer

A) True 
 B)False

Question 17

The ________ is a federal statute primarily designed to prevent fraud in the trading of securities after they are issued.

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 18

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

Accepted Answer

A) True 
 B)False

Question 19

________ 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 10b-5 
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 10b-5

Question 20

Which of the following is classified under "common securities"?

Accepted Answer

A) real estate 
B) bullion 
C) debenture 
D) bank deposit 
A) real estate 
B) bullion 
C) debenture 
D) bank deposit

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

What is insider trading? How is it regulated in the United States?

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

Which of the following is true of exempt securities?

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

Interests or instruments that are expressly mentioned in securities acts are known as ________.

Section 10(b)of the Securities Exchange Act prohibits the use of manipulative and deceptive devices in contravention of the rules and regulations prescribed by the SEC.

Which of the following is true of registration statements?

Electronic Data Gathering,Analysis,and Retrieval system (EDGA R)is the world's largest electronic securities exchange.

Civil liability under Section 11 is imposed on issuers who are negligent in not discovering the fraud in their security offerings.

________ 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.

Investors who purchased unregistered securities can rescind their purchase but not recover damages.

The ________ imposes liability under Section 10(b)and Rule 10b-5 on an outsider who misappropriates information about a company,in violation of his or her fiduciary duty,and then trades in the securities of that company.

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

Distinguish between nonissuer exemption,intrastate offering exemption,and private placement exemption.

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

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

The ________ is a federal statute primarily designed to prevent fraud in the trading of securities after they are issued.

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

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

Which of the following is classified under "common securities"?

Legal Environment of Business and Online Commerce

Courts and Jurisdiction

Judicial, alternative, and Online 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 Crime

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

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

Creation of Negotiable Instruments

Holder in Due Course and Transferability

Liability, defenses, and Discharge

Banking System and Electronic Financial Transactions

Credit, mortgages, and Debtors Rights

Secured Transactions

Bankruptcy and Reorganization

Agency Formation and Termination

Liability of Principals, agents, and Independent Contractors

Employment, worker Protection, and Immigration Law

Labor Law

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, real Property, and Insurance

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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