Question 1

The U.S. federal law that impacts the creation and sales of securities is the:

Accepted Answer

A) Securities Exchange Act of 1934 
B) Securities Act of 1933 
C) Investment Company Act of 1940 
D) Investment Advisers Act of 1940 
A) Securities Exchange Act of 1934 
B) Securities Act of 1933 
C) Investment Company Act of 1940 
D) Investment Advisers Act of 1940

Question 2

Which of the following SEC registration exemptions has no financing limit and permits a maximum of 35 unaccredited investors?

Accepted Answer

A) Section 4(a)2 
B) Regulation D: Rule 504 
C) Regulation D: Rule 506 
D) Regulation A 
A) Section 4(a)2 
B) Regulation D: Rule 504 
C) Regulation D: Rule 506 
D) Regulation A

Question 3

Rule 501 of Regulation D expands the categories of accredited investors. Which of the following is not one of the categories?

Accepted Answer

A) any organization formed for the specific purpose of acquiring securities with assets in excess of $5 million 
B) any director or executive officer of the issuer of securities being sold 
C) any individual whose net worth exceeds $1 million 
D) any partnership 
A) any organization formed for the specific purpose of acquiring securities with assets in excess of $5 million 
B) any director or executive officer of the issuer of securities being sold 
C) any individual whose net worth exceeds $1 million 
D) any partnership

Question 4

Which of the following rules under Regulation D has a $5 million financing limit?

Accepted Answer

A) Rule 503 
B) Rule 504 
C) Rule 506 
D) Rule 507 
A) Rule 503 
B) Rule 504 
C) Rule 506 
D) Rule 507

Question 5

State laws designed to protect high net-worth investors from investing in fraudulent security offerings are known as blue-sky laws.

Accepted Answer

A) True 
 B)False

Question 6

Rule 504 of Regulation D limits the total number of investors to:

Accepted Answer

A) 35 total investors 
B) 100 total investors 
C) 35 unaccredited investors and any number of accredited investors 
D) none of these choices; there is no limit on the number of accredited or unaccredited investors 
A) 35 total investors 
B) 100 total investors 
C) 35 unaccredited investors and any number of accredited investors 
D) none of these choices; there is no limit on the number of accredited or unaccredited investors

Question 7

A private placement, or a transaction by an issuer not involving any public offering, is exempt from registering securities.

Accepted Answer

A) True 
 B)False

Question 8

The JOBS Act of 2012 created several important changes in Rule 506 of Regulation D and the expanded version of a Regulation A-like offering.

Accepted Answer

A) True 
 B)False

Question 9

The typical business organization for a venture in its rapid-growth stage is a partnership or LLC.

Accepted Answer

A) True 
 B)False

Question 10

Regulation of investment companies (including professional venture capital firms)is carried out under the Investment Company Act of 1940.

Accepted Answer

A) True 
 B)False

Question 11

Regulation A issuers are allowed to "test the waters" before preparing the offering circular (unlike almost all other security offerings).

Accepted Answer

A) True 
 B)False

Question 12

The Investment Company Act of 1940 defines investment companies and excludes them from using some of the registration exemptions originating in the 1933 Act.

Accepted Answer

A) True 
 B)False

Question 13

The Securities Exchange Act was passed in 1933, and the Securities Act was passed in 1934.

Accepted Answer

A) True 
 B)False

Question 14

Regulation A, while technically considered an exemption from registration, is a public offering rather than a private placement.

Accepted Answer

A) True 
 B)False

Question 15

Rule 503 dictates that for all Regulation D exemptions, a Form D should be filed within how many days after the first sale of securities?

Accepted Answer

A) 1 day 
B) 15 days 
C) 30 days 
D) 90 days 
A) 1 day 
B) 15 days 
C) 30 days 
D) 90 days

Question 16

The Securities Act of 1933 is the main body of federal law governing the creation and sale of securities in the United States.

Accepted Answer

A) True 
 B)False

Question 17

The trading of securities is regulated under the Securities and Exchange Act of 1964.

Accepted Answer

A) True 
 B)False

Question 18

While Section 4(a)2 does not limit the dollar amount of an offering, the interpretation of the law has stipulated that the:

Accepted Answer

A) investors must be sophisticated 
B) number of investors must be limited to 35 
C) funds must be raised within a 12-month period 
D) offering must be extended to the public, and not only investors who have a relationship with the issuer 
A) investors must be sophisticated 
B) number of investors must be limited to 35 
C) funds must be raised within a 12-month period 
D) offering must be extended to the public, and not only investors who have a relationship with the issuer

Question 19

A Rule 504 exemption under Regulation D has no limit in terms of the number and qualifications of investors.

Accepted Answer

A) True 
 B)False

Question 20

In the Ninth Circuit Court of Appeals decision on SEC v. Murphy , all of the following were considerations in determining an offering to be a private placement except :

Accepted Answer

A) there must be an arm's length relationship between the issuer of the security and the prospective purchaser 
B) the number of offerees must be limited 
C) the size and the manner of the offering must not indicate widespread solicitation 
D) the offerees must be sophisticated 
A) there must be an arm's length relationship between the issuer of the security and the prospective purchaser 
B) the number of offerees must be limited 
C) the size and the manner of the offering must not indicate widespread solicitation 
D) the offerees must be sophisticated

The U.S. federal law that impacts the creation and sales of securities is the:

Which of the following SEC registration exemptions has no financing limit and permits a maximum of 35 unaccredited investors?

Rule 501 of Regulation D expands the categories of accredited investors. Which of the following is not one of the categories?

Which of the following rules under Regulation D has a $5 million financing limit?

State laws designed to protect high net-worth investors from investing in fraudulent security offerings are known as blue-sky laws.

Rule 504 of Regulation D limits the total number of investors to:

A private placement, or a transaction by an issuer not involving any public offering, is exempt from registering securities.

The JOBS Act of 2012 created several important changes in Rule 506 of Regulation D and the expanded version of a Regulation A-like offering.

The typical business organization for a venture in its rapid-growth stage is a partnership or LLC.

Regulation of investment companies (including professional venture capital firms)is carried out under the Investment Company Act of 1940.

Regulation A issuers are allowed to "test the waters" before preparing the offering circular (unlike almost all other security offerings).

The Investment Company Act of 1940 defines investment companies and excludes them from using some of the registration exemptions originating in the 1933 Act.

The Securities Exchange Act was passed in 1933, and the Securities Act was passed in 1934.

Regulation A, while technically considered an exemption from registration, is a public offering rather than a private placement.

Rule 503 dictates that for all Regulation D exemptions, a Form D should be filed within how many days after the first sale of securities?

The Securities Act of 1933 is the main body of federal law governing the creation and sale of securities in the United States.

The trading of securities is regulated under the Securities and Exchange Act of 1964.

While Section 4(a)2 does not limit the dollar amount of an offering, the interpretation of the law has stipulated that the:

A Rule 504 exemption under Regulation D has no limit in terms of the number and qualifications of investors.

In the Ninth Circuit Court of Appeals decision on SEC v. Murphy , all of the following were considerations in determining an offering to be a private placement except :

Introduction to Finance for Entrepreneurs

Developing the Business Idea

Organizing and Financing a New Venture

Preparing and Using Financial Statements

Evaluating Operating and Financial Performance

Managing Cash Flow

Types and Costs of Financial Capital

Projecting Financial Statements

Valuing Early Stage Ventures

Venture Capital Valuation Methods

Professional Venture Capital

Other Financing Alternatives

Security Structures and Determining Enterprise Values

Harvesting the Business Venture Investment

Financially Troubled Ventures Turnaround Opportunities

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Exam 8: Securities Law Considerations When Obtaining Venture Financing

The U.S. federal law that impacts the creation and sales of securities is the:

Which of the following SEC registration exemptions has no financing limit and permits a maximum of 35 unaccredited investors?

Rule 501 of Regulation D expands the categories of accredited investors. Which of the following is not one of the categories?

Which of the following rules under Regulation D has a $5 million financing limit?

State laws designed to protect high net-worth investors from investing in fraudulent security offerings are known as blue-sky laws.

Rule 504 of Regulation D limits the total number of investors to:

A private placement, or a transaction by an issuer not involving any public offering, is exempt from registering securities.

The JOBS Act of 2012 created several important changes in Rule 506 of Regulation D and the expanded version of a Regulation A-like offering.

The typical business organization for a venture in its rapid-growth stage is a partnership or LLC.

Regulation of investment companies (including professional venture capital firms)is carried out under the Investment Company Act of 1940.

Regulation A issuers are allowed to "test the waters" before preparing the offering circular (unlike almost all other security offerings).

The Investment Company Act of 1940 defines investment companies and excludes them from using some of the registration exemptions originating in the 1933 Act.

The Securities Exchange Act was passed in 1933, and the Securities Act was passed in 1934.

Regulation A, while technically considered an exemption from registration, is a public offering rather than a private placement.

Rule 503 dictates that for all Regulation D exemptions, a Form D should be filed within how many days after the first sale of securities?

The Securities Act of 1933 is the main body of federal law governing the creation and sale of securities in the United States.

The trading of securities is regulated under the Securities and Exchange Act of 1964.

While Section 4(a)2 does not limit the dollar amount of an offering, the interpretation of the law has stipulated that the:

A Rule 504 exemption under Regulation D has no limit in terms of the number and qualifications of investors.

In the Ninth Circuit Court of Appeals decision on SEC v. Murphy , all of the following were considerations in determining an offering to be a private placement except :

Introduction to Finance for Entrepreneurs

Developing the Business Idea

Organizing and Financing a New Venture

Preparing and Using Financial Statements

Evaluating Operating and Financial Performance

Managing Cash Flow

Types and Costs of Financial Capital

Projecting Financial Statements

Valuing Early Stage Ventures

Venture Capital Valuation Methods

Professional Venture Capital

Other Financing Alternatives

Security Structures and Determining Enterprise Values

Harvesting the Business Venture Investment

Financially Troubled Ventures Turnaround Opportunities

Filters