Question 1

State securities statutes are known as

Accepted Answer

A) going dark laws. 
B) blue sky laws. 
C) big country laws. 
D) sunshine laws. 
A) going dark laws. 
B) blue sky laws. 
C) big country laws. 
D) sunshine laws. B

Question 2

Securities issued by banks are exempt from SEC registration.

Accepted Answer

A) True 
 B)False  True

Question 3

Offerings under Regulation A of the Securities Act of 1933,although called private offerings,are really small public offerings.

Accepted Answer

A) True 
 B)False  True

Question 4

The 1934 Act requires companies with a class of stock that is publicly traded to make ongoing,regular disclosure with the SEC.

Accepted Answer

A) True 
 B)False

Question 5

Officials from Vital Corporation are traveling around the country making presentations to prospective investors.The officials are conducting a

Accepted Answer

A) prospectus. 
B) secondary offering. 
C) road show. 
D) private offering. 
A) prospectus. 
B) secondary offering. 
C) road show. 
D) private offering.

Question 6

Which of the following has the most elaborate disclosure requirements?

Accepted Answer

A) initial public offering 
B) Regulation A 
C) Regulation D 
D) crowdfunding 
A) initial public offering 
B) Regulation A 
C) Regulation D 
D) crowdfunding

Question 7

Which of the following is reported on Form 8-K?

Accepted Answer

A) audited financial statements 
B) the resignation of a director over a policy dispute 
C) unaudited financial statements 
D) All of these are correct. 
A) audited financial statements 
B) the resignation of a director over a policy dispute 
C) unaudited financial statements 
D) All of these are correct.

Question 8

Section 16 of the 1934 Act prohibits short-swing trading on the part of officers,directors,and controlling shareholders who

Accepted Answer

A) own more than 25% of the company. 
B) are also on the board of directors of the company. 
C) own more than 10% of the company. 
D) trade their shares in order to invest in another company. 
A) own more than 25% of the company. 
B) are also on the board of directors of the company. 
C) own more than 10% of the company. 
D) trade their shares in order to invest in another company.

Question 9

Under which of the following exemptions is there no dollar limitation?

Accepted Answer

A) Rule 504 
B) Rule 505 
C) Rule 506 
D) Regulation A 
A) Rule 504 
B) Rule 505 
C) Rule 506 
D) Regulation A

Question 10

Jackie learned of insider trading information while talking to Mark,a director of a large corporation.She took advantage of the information to buy stock and make a huge financial gain.If she is accused of violating securities law,what must the government prove in order to gain a conviction against Jackie?

Accepted Answer

The government must prove that (1)Jackie

Question 11

Pursuant to a public offering,a CPA firm audited the financial statements.After the offering,omissions and misstatements were found.The CPA firm is now being sued by the purchasers of the stock.The purchasers are alleging that the erroneous financial statements in the registration statement caused them to suffer a monetary loss.The CPA firm can avoid liability if it can prove

Accepted Answer

A) that it used due diligence in auditing the financial statements. 
B) the corporation was the party who made misstatements and omissions. 
C) the firm believed that the statements were accurate. 
D) None of these will avoid liability. 
A) that it used due diligence in auditing the financial statements. 
B) the corporation was the party who made misstatements and omissions. 
C) the firm believed that the statements were accurate. 
D) None of these will avoid liability.

Question 12

To recover for an alleged violation of SEC Rule 10b-5,a plaintiff is required to prove reliance on a misstatement or omission relative to the purchase of the security.

Accepted Answer

A) True 
 B)False

Question 13

Securities offered and sold entirely within one state by a corporation of that state are exempt from registration.

Accepted Answer

A) True 
 B)False

Question 14

What are the purposes of a registration statement and what information must it contain?

Accepted Answer

A registration statement has two purpose

Question 15

Any securities offerings covered by the NSMIA must comply with state securities laws.

Accepted Answer

A) True 
 B)False

Question 16

Section 16 of the 1934 Act addresses what type of insider trading?

Accepted Answer

A) classic insider trading 
B) tipping 
C) short-swing trading 
D) takeovers 
A) classic insider trading 
B) tipping 
C) short-swing trading 
D) takeovers

Question 17

Under Regulation D,institutions such as banks and insurance companies are ​considered to be what type of investors?

Accepted Answer

A) ​accredited 
B) ​unaccredited 
C) ​restricted 
D) ​unrestricted 
A) ​accredited 
B) ​unaccredited 
C) ​restricted 
D) ​unrestricted

Question 18

Ed,a vice-president of Palmette Products,Inc. ,buys 1,000 shares of his company's stock on June 15.His son has medical problems in September,and Ed sells the stock at a profit.Under Section 16,Ed

Accepted Answer

A) must turn over to Palmette any profits he made on the sale. 
B) may keep any profits on the sale since he had a good reason to sell and was not selling in order to manipulate the market. 
C) may keep the profits from the sale as long as he reported his sale to the SEC within two business days. 
D) may keep any profits from the sale if he did not act on secret information when he sold the shares. 
A) must turn over to Palmette any profits he made on the sale. 
B) may keep any profits on the sale since he had a good reason to sell and was not selling in order to manipulate the market. 
C) may keep the profits from the sale as long as he reported his sale to the SEC within two business days. 
D) may keep any profits from the sale if he did not act on secret information when he sold the shares.

Question 19

Discuss the process an issuer follows for either an IPO or a secondary offering.

Accepted Answer

Underwriting.For a public offering,compa

Question 20

The 1934 Act is primarily intended to

Accepted Answer

A) maintain the integrity of the secondary market for securities. 
B) make sure companies who wish to raise money by the sale of securities comply with disclosure requirements for the initial offering. 
C) coordinate federal and state laws with a primary emphasis on allowing the individual states to maintain primary control over securities law. 
D) broaden the SEC's enforcement power. 
A) maintain the integrity of the secondary market for securities. 
B) make sure companies who wish to raise money by the sale of securities comply with disclosure requirements for the initial offering. 
C) coordinate federal and state laws with a primary emphasis on allowing the individual states to maintain primary control over securities law. 
D) broaden the SEC's enforcement power.

Exam 37: Securities Regulation

State securities statutes are known as

Securities issued by banks are exempt from SEC registration.

Offerings under Regulation A of the Securities Act of 1933,although called private offerings,are really small public offerings.

The 1934 Act requires companies with a class of stock that is publicly traded to make ongoing,regular disclosure with the SEC.

Officials from Vital Corporation are traveling around the country making presentations to prospective investors.The officials are conducting a

Which of the following has the most elaborate disclosure requirements?

Which of the following is reported on Form 8-K?

Section 16 of the 1934 Act prohibits short-swing trading on the part of officers,directors,and controlling shareholders who

Under which of the following exemptions is there no dollar limitation?

To recover for an alleged violation of SEC Rule 10b-5,a plaintiff is required to prove reliance on a misstatement or omission relative to the purchase of the security.

Securities offered and sold entirely within one state by a corporation of that state are exempt from registration.

What are the purposes of a registration statement and what information must it contain?

Any securities offerings covered by the NSMIA must comply with state securities laws.

Section 16 of the 1934 Act addresses what type of insider trading?

Under Regulation D,institutions such as banks and insurance companies are ​considered to be what type of investors?

Ed,a vice-president of Palmette Products,Inc. ,buys 1,000 shares of his company's stock on June 15.His son has medical problems in September,and Ed sells the stock at a profit.Under Section 16,Ed

Discuss the process an issuer follows for either an IPO or a secondary offering.

The 1934 Act is primarily intended to

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Under Regulation D,institutions such as banks and insurance companies are considered to be what type of investors?