Question 1

The most important rule of the 1933 Act is that every transaction in securities must be registered with the SEC or be exempt from registration.

Accepted Answer

A) True 
 B)False

Question 2

The 1934 Act definition of a security is similar to the 1933 Act definition except that it excludes notes and drafts that mature not more than nine months from the date of issuance.

Accepted Answer

A) True 
 B)False

Question 3

Most of the information in a prospectus must be included in a registration statement,which is the basic selling document of a 1933 Act registered offering.

Accepted Answer

A) True 
 B)False

Question 4

Under the _____,the investor's reliance on the integrity of the market was found to justify a presumption of reliance on the misrepresentation.

Accepted Answer

A)   misappropriation theory
B)   classical theory
C)   fraud-on-the-market theory
D)   efficient markets theoryE) C) and D)
F) A) and D)

Question 5

A wash sale:

Accepted Answer

A)   refers to a legal activity that manipulates the price of a security.
B)   occurs each time new securities are issued.
C)   comes under the liability provisions of the 1934 Act.
D)   is a violation under Section 10(b)  of the 1934 Act.E) All of the above
F) A) and D)

Question 6

A wash sale is a legal practice that is designed to stimulate substantial trading activity.

Accepted Answer

A) True 
 B)False

Question 7

Average investors who offer and sell the securities they own,yet avoid the need to have the issuer register the securities,are called _____.

Accepted Answer

A)   nonissuers
B)   issuers
C)   dealers
D)   brokersE) All of the above
F) C) and D)

Question 8

Under the _____,a person's undisclosed,self-serving use of another's information to purchase or sell securities,in breach of a duty of loyalty and confidentiality,defrauds the individual who provided the information.

Accepted Answer

A)   blue-sky law
B)   misappropriation theory
C)   fraud-on the-market theory
D)   price disparity lawE) All of the above
F) None of the above

Question 9

Which section of the 1933 Act imposes liability on any person who has violated the timing,manner,and content restrictions on offers and sales of new issues?

Accepted Answer

A)   12(2) 
B)   17(a) 
C)   12(1) 
D)   11E) C) and D)
F) B) and D)

Question 10

Negligence is the most important element of a Rule 10b-5 violation.

Accepted Answer

A) True 
 B)False

Question 11

According to the Securities and Exchange Commission (SEC) ,per se fraudulent statements include those that:

Accepted Answer

A)   tout securities and make unreasonable forecasts.
B)   specify the use of the proceeds of the issuance.
C)   outline the annual return on an investment.
D)   give full details about the securities to be offered.E) All of the above
F) C) and D)

Question 12

A public offer by a bidder to purchase a target company's equity securities directly from its shareholders at a specified price for a fixed period of time is called a(n) _____.

Accepted Answer

A)   bond exchange offer
B)   prospectus
C)   investment contract
D)   tender offerE) None of the above
F) C) and D)

Question 13

Jodie's brother is a director at Trip Corporation.He calls her and says that Trip's earnings,not yet announced,will be up by 75 percent and that Jodie should buy Trip's common stock.Under these circumstances,Jodie:

Accepted Answer

A)   can trade because she obtained public information from an insider.
B)   cannot trade because she is not an insider.
C)   can trade because the information will eventually be made public.
D)   cannot trade because she is the relative of an insider.E) All of the above
F) B) and D)

Question 14

Describe the liability provisions of the Securities Exchange Act of 1934 against insider trading,under Rule 10b-5 of the Securities Exchange Act of 1934.

Accepted Answer

The basic rule under the 1934 Act is tha...

Question 15

Unlike the Uniform Securities Act of 1956,the new act of 1985 contained an additional provision demanding broker-dealer registration.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following statements is true of the registration requirements of the 1933 Act?

Accepted Answer

A)   It requires the issuer of securities to register the securities with the Securities and Exchange Commission prior to their offer or sale to the public.
B)   The buyer of the securities must file a registration statement with the Securities and Exchange Commission.
C)   Exempt securities need to be registered regardless of who sells the securities or how they are sold.
D)   The registration statement should exclude the timing, manner, and content of offers and sales.The 1933 Act requires the issuer of securities to register the securities with the Securities and Exchange Commission (SE
C)   prior to their offer or sale to the public. Historical and current data about the issuer and its business (including certified financial statements) , full details about the securities to be offered, and the use of the proceeds of the issuance, among other information, must be included in a registration statement prepared by the issuer of the securities. The issuer must file the registration statement with the SEC.E) B) and C)
F) None of the above

Question 17

The Securities Act of 1933 is concerned primarily with private distributions of securities.

Accepted Answer

A) True 
 B)False

Question 18

Registration by coordination:

Accepted Answer

A)   allows the issuer to file the 1933 Act registration statement with the state securities administrator.
B)   is prohibited by both the 1933 and 1934 Acts.
C)   increases the issuer's expense of complying with state laws when making an interstate offering.
D)   is concerned primarily with public distributions of securities.E) C) and D)
F) A) and C)

Question 19

_____ are important securities exemptions from the registration provisions of the 1933 Act.

Accepted Answer

A)   Securities of profit issuers
B)   Short-term notes and drafts
C)   Private offerings
D)   Initial market securitiesE) B) and C)
F) None of the above

Question 20

Under the Securities Act of 1933,liability is imposed for improper offers and sales when:

Accepted Answer

A)   a person sells his securities to another private party without notifying the Securities and Exchange Commission.
B)   a person offers or sells unregistered and nonexempt securities in violation of the Act.
C)   the investor finds that the registration statement for the security contained an untrue statement.
D)   the issuer inadvertently omits a few material facts in the registration statement.E) A) and C)
F) C) and D)

Exam 31: Securities Regulation

Average investors who offer and sell the securities they own,yet avoid the need to have the issuer register the securities,are called _____.

Correct AnswerverifiedShow Answer

Describe the liability provisions of the Securities Exchange Act of 1934 against insider trading,under Rule 10b-5 of the Securities Exchange Act of 1934.

Correct AnswerverifiedThe basic rule under the 1934 Act is tha...View AnswerShow Answer

A wash sale is a legal practice that is designed to stimulate substantial trading activity.

Correct AnswerverifiedShow Answer

According to the Securities and Exchange Commission (SEC) ,per se fraudulent statements include those that:

Correct AnswerverifiedShow Answer

Under the Securities Act of 1933,liability is imposed for improper offers and sales when:

Correct AnswerverifiedShow Answer

_____ are important securities exemptions from the registration provisions of the 1933 Act.

Correct AnswerverifiedShow Answer

Which section of the 1933 Act imposes liability on any person who has violated the timing,manner,and content restrictions on offers and sales of new issues?

Correct AnswerverifiedShow Answer

Under the _____,the investor's reliance on the integrity of the market was found to justify a presumption of reliance on the misrepresentation.

Correct AnswerverifiedShow Answer

A wash sale:

Correct AnswerverifiedShow Answer

Registration by coordination:

Correct AnswerverifiedShow Answer

A public offer by a bidder to purchase a target company's equity securities directly from its shareholders at a specified price for a fixed period of time is called a(n) _____.

Correct AnswerverifiedShow Answer

Unlike the Uniform Securities Act of 1956,the new act of 1985 contained an additional provision demanding broker-dealer registration.

Correct AnswerverifiedShow Answer

Jodie's brother is a director at Trip Corporation.He calls her and says that Trip's earnings,not yet announced,will be up by 75 percent and that Jodie should buy Trip's common stock.Under these circumstances,Jodie:

Correct AnswerverifiedShow Answer

Under the _____,a person's undisclosed,self-serving use of another's information to purchase or sell securities,in breach of a duty of loyalty and confidentiality,defrauds the individual who provided the information.

Correct AnswerverifiedShow Answer

The Securities Act of 1933 is concerned primarily with private distributions of securities.

Correct AnswerverifiedShow Answer

Which of the following statements is true of the registration requirements of the 1933 Act?

Correct AnswerverifiedShow Answer

The 1934 Act definition of a security is similar to the 1933 Act definition except that it excludes notes and drafts that mature not more than nine months from the date of issuance.

Correct AnswerverifiedShow Answer

Negligence is the most important element of a Rule 10b-5 violation.

Correct AnswerverifiedShow Answer

The most important rule of the 1933 Act is that every transaction in securities must be registered with the SEC or be exempt from registration.

Correct AnswerverifiedShow Answer

Most of the information in a prospectus must be included in a registration statement,which is the basic selling document of a 1933 Act registered offering.

Correct AnswerverifiedShow Answer

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The basic rule under the 1934 Act is tha...
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