Question 1

Which of the following defensive strategies refers to bankrupting a company?

Accepted Answer

A)  porcupine provision 
B)  scorched-earth policy 
C)  shark repellent 
D)  white knight

Question 2

Amendments to the Securities Exchange Act in 1975 required any exchange or over-the- counter market to .

Accepted Answer

A)  register each individual market transaction with the Securities and Exchange Commission 
B)  obtain advance approval from the Securities and Exchange Commission prior to any rule changes 
C)  report profits and losses to the Securities and Exchange Commission on a monthly basis 
D)  cease all trading activity in times of severe recession

Question 3

Often, a stock price is "pumped up" as a result of information obtained in chat rooms. After it is "pumped," it is quickly " ." The SEC has been tracing such actions that seek to manipulate stock prices in violation of the 1934 Exchange Act.

Accepted Answer

A)  diluted 
B)  split 
C)  dumped 
D)  floated

Question 4

According to the Dodd-Frank legislation, Federal Deposit Insurance Corporation-insured institutions are allowed to have only percent of their capital invested in hedge funds and private equity funds.

Accepted Answer

A)  2 
B)  3 
C)  4 
D)  5

Question 5

The maximum penalty for securities fraud under the Sarbanes-Oxley Act is years in prison.

Accepted Answer

A)  10 
B)  25 
C)  35 
D)  45

Question 6

The Securities and Exchange Commission is not charged with evaluating the worth of a public offering of securities by a corporation.

Accepted Answer

A) True 
 B)False

Question 7

Discuss the risks taken by large banks and how the Dodd-Frank legislation restricts them.

Accepted Answer

The answer of Discuss the risks taken by large banks...

Question 8

The Securities and Exchange Commission recognizes an issuer that has reported continuously under the 1934 Securities Exchange Act for at least three years as a(n) issuer.

Accepted Answer

A)  unseasoned 
B)  seasoned 
C)  non-reporting 
D)  well-known seasoned

Question 9

Which of the following Internet activities has particularly affected the development of securities fraud online?

Accepted Answer

A)  email 
B)  private blogs 
C)  chat rooms 
D)  browsing

Question 10

The Securities Act of 1933 regulates the initial offering of securities by public corporations by prohibiting an offer or sale of securities not registered with the Securities and Exchange Commission.

Accepted Answer

A) True 
 B)False

Question 11

The Securities Investor Protection Act of 1970 gives the Securities and Exchange Commission authority to regulate the finances of public investment companies that invest in and trade in securities.

Accepted Answer

A) True 
 B)False

Question 12

The Foreign Corrupt Practices Act of 1977 is aimed at .

Accepted Answer

A)  U.S. companies attempting to bribe foreign officials 
B)  foreign companies attempting to bribe U.S. officials 
C)  foreign companies engaging in insider trading 
D)  U.S. companies conspiring with foreign companies to engage in insider trading

Question 13

Under the Securities Act of 1933, Section allows the Securities and Exchange Commission to exempt offerings not exceeding $5 million.

Accepted Answer

A)  11(a) 
B)  17(a) 
C)  3(b) 
D)  6(b)

Question 14

A red herring is an investment banking firm that purchases a securities issue from the issuing corporation with a view to eventually selling the securities to brokerage houses, which, in turn, sell them to the public.

Accepted Answer

A) True 
 B)False

Question 15

Under the FCPA's anti-bribery provisions, the standard of criminal conduct to which corporate officials and employees are held is .

Accepted Answer

A)  knowing 
B)  reckless 
C)  negligent 
D)  strict liability

Question 16

Which of the following is true of the Sarbanes-Oxley Act of 2002?

Accepted Answer

A)  It follows the traditional approach to corporate governance. 
B)  It established the Public Company Accounting Oversight Board. 
C)  It requires external auditors to certify financial reports. 
D)  It requires a separate team to be formed to certify financial reports.

Question 17

Which of the following is a correct statement regarding enforcement of the FCPA?

Accepted Answer

A)  The SEC cannot investigate alleged FCPA violations. 
B)  The SEC cannot bring civil charges under the FCPA's bribery provisions. 
C)  The SEC refers criminal cases to the U.S. Justice Department for prosecution. 
D)  The SEC tries FCPA criminal cases internally, pursuant to the prosecutorial mandate assigned the commission under the act.

Question 18

The Fed, with the approval of the Financial Stability Oversight Council, has the power to break up large firms and require such firms to increase their reserves against future losses.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is true of the Financial Stability Oversight Council?

Accepted Answer

A)  The council will identify banks or nonbanks that pose a threat to the financial system. 
B)  The council was to be subject to oversight by the Government Accountability Office for a short period during 2008. 
C)  It does not include members of the Treasury and the Federal Reserve. 
D)  It was established by the Securities Exchange Act of 1934.

Question 20

Online IPOs are a frequent occurrence that has brought to the marketplace of securities.

Accepted Answer

A)  efficiency 
B)  predictability 
C)  privacy 
D)  accountability

Exam 23: Rules Governing the Issuance and Trading of Securities

Which of the following defensive strategies refers to bankrupting a company?

Amendments to the Securities Exchange Act in 1975 required any exchange or over-the- counter market to .

Often, a stock price is "pumped up" as a result of information obtained in chat rooms. After it is "pumped," it is quickly " ." The SEC has been tracing such actions that seek to manipulate stock prices in violation of the 1934 Exchange Act.

According to the Dodd-Frank legislation, Federal Deposit Insurance Corporation-insured institutions are allowed to have only percent of their capital invested in hedge funds and private equity funds.

The maximum penalty for securities fraud under the Sarbanes-Oxley Act is years in prison.

The Securities and Exchange Commission is not charged with evaluating the worth of a public offering of securities by a corporation.

Discuss the risks taken by large banks and how the Dodd-Frank legislation restricts them.

The Securities and Exchange Commission recognizes an issuer that has reported continuously under the 1934 Securities Exchange Act for at least three years as a(n) issuer.

Which of the following Internet activities has particularly affected the development of securities fraud online?

The Securities Act of 1933 regulates the initial offering of securities by public corporations by prohibiting an offer or sale of securities not registered with the Securities and Exchange Commission.

The Securities Investor Protection Act of 1970 gives the Securities and Exchange Commission authority to regulate the finances of public investment companies that invest in and trade in securities.

The Foreign Corrupt Practices Act of 1977 is aimed at .

Under the Securities Act of 1933, Section allows the Securities and Exchange Commission to exempt offerings not exceeding $5 million.

A red herring is an investment banking firm that purchases a securities issue from the issuing corporation with a view to eventually selling the securities to brokerage houses, which, in turn, sell them to the public.

Under the FCPA's anti-bribery provisions, the standard of criminal conduct to which corporate officials and employees are held is .

Which of the following is true of the Sarbanes-Oxley Act of 2002?

Which of the following is a correct statement regarding enforcement of the FCPA?

The Fed, with the approval of the Financial Stability Oversight Council, has the power to break up large firms and require such firms to increase their reserves against future losses.

Which of the following is true of the Financial Stability Oversight Council?

Online IPOs are a frequent occurrence that has brought to the marketplace of securities.