Question 1

The Securities Exchange Act of 1934 is a one-time disclosure law.

Accepted Answer

A) True 
 B)False

Question 2

Social Media Sites Corporation is required to file a registration statement with the Securities and Exchange Commission. This statement must contain

Accepted Answer

A)  a copy of prospectuses to be provided to investors.
B)  a description of securities being offered for sale.
C)  a record of pre-registration sales in securities.
D)  all of the choices.E) A) and B)
F) C) and D)

Question 3

Trail Bike Corporation is a public company whose shares are traded in the public securities markets. Under the Securities Act of 1933, Trail Bike is required to​

Accepted Answer

A)   ​contribute to the operations of national stock exchanges.
B)   ​disclose financial and other information about its securities.
C)   ​engage in market surveillance to deter undesirable practices.
D)   ​all of the choices.E) A) and B)
F) A) and C) B

Question 4

Fact Pattern 30-2
​Eddie, an accountant for Fresh Dairy, Inc., learns of undisclosed company plans to market a new smooth-tasting, fat-free butter. Eddie buys 10,000 shares of Fresh Dairy stock. He reveals the company plans to Giselle, who buys 5,000 shares. Giselle tells Hong, who tells Irwin, each of whom buy 1,000 shares. They know that Giselle got her information from Eddie. When Fresh Dairy publicly announces its new product, Eddie, Giselle, Hong, and Irwin sell their stock for a profit.
-Refer to Fact Pattern 30-2. Under the Securities Exchange Act of 1934, Giselle is most likely

Accepted Answer

A)   ​liable for insider trading.
B)   ​not liable because Giselle did not prevent others from profiting.
C)   ​not liable because Giselle did not solicit information from Eddie.
D)   ​not liable because Giselle does not work for Fresh Dairy.E) B) and C)
F) A) and D) A

Question 5

Household Products Corporation wants to make an offering of securities to the public. This offering is not exempt from registration under the Securities Act of 1933. Before Household Products sells its securities, it must provide investors with​

Accepted Answer

A)   ​a forward-looking financial forecast.
B)   ​an investment contract.
C)   ​a prospectus.
D)   ​samples of its products.E) A) and B)
F) C) and D)

Question 6

Fleet Delivery Corporation is a public company with a market capitalization of less than $75 million. Fleet is poised to issue securities in a transaction that, under the Securities Act of 1933, is "exempt." This enables Fleet to​

Accepted Answer

A)   ​reduce the compliance costs by not requiring an auditor report.
B)   buy and sell the securities without liability for "recaptures."​
C)   ​make forward-looking financial forecasts without liability.
D)   ​withhold inside information from accredited investors.E) A) and B)
F) A) and C)

Question 7

Liability can be imposed on those who are negligent in not discovering fraud in connection with a registration statement or prospectus.

Accepted Answer

A) True 
 B)False

Question 8

State corporation statues set up the legal framework for corporate governance.

Accepted Answer

A) True 
 B)False

Question 9

Rollo is the chief executive officer of Specialty Magazines, Inc., which is required to file certain financial reports with the Securities and Exchange Commission (SEC) . Under the Sarbanes-Oxley Act of 2002, Rollo must

Accepted Answer

A)   ​certify that the reports are complete and accurate.
B)   ​designate a corporate official to assume liability for inaccuracies.
C)   ​do nothing.
D)   ​read the reports and be prepared to answer questions about them.E) B) and C)
F) A) and D)

Question 10

State securities laws apply mainly to interstatetransactions.

Accepted Answer

A) True 
 B)False  False

Question 11

Securities can be sold after the effective date of the registration statement without restrictions.

Accepted Answer

A) True 
 B)False

Question 12

Under the Sarbanes-Oxley Act of 2002, chief financial officers must certify the accuracy of information in corporate financial statements and reports that are filed with the Securities and Exchange Commission.

Accepted Answer

A) True 
 B)False

Question 13

Global Resources Corporation, and its officers, directors, and shareholders, buy and sell securities. Section 10(b)  of the Securities Exchange Act of 1934 applies to the purchase or sale of a security​

Accepted Answer

A)   only by an investment company.
B)   ​only involving short-swing profits.
C)   ​only involving a tipper and tippee.
D)   ​in almost any circumstances.E) C) and D)
F) A) and D)

Question 14

Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 apply just to corporate "insiders."​

Accepted Answer

A) True 
 B)False

Question 15

Fact Pattern 30-1
Drilling Tools, Inc., wants to make an initial public offering of securities. Drilling Tools believes that it qualifies for an exemption under Regulation A from the full registration requirement of the federal Securities Act of 1933.
-Refer to Fact Pattern 30-1. If Drilling Tools is exempt from the federal registration requirement, Drilling Tools is

Accepted Answer

A)   ​automatically exempt from any state registration requirement.
B)   ​not subject to any state securities laws.
C)   ​not necessarily exempt under a state registration requirement.
D)   ​automatically subject to all state registration requirements.E) A) and B)
F) B) and C)

Question 16

Orbital Flights, Inc., is required to register its securities under Section 12 of the Securities Exchange Act of 1934. Section 16(b)  of the act covers

Accepted Answer

A)   ​the declaration of dividends by Orbital's board of directors.
B)   ​the later re-registration of Orbital's securities.
C)   ​the short-swing activities of Orbital's insiders.
D)   ​the solicitation of proxies from Orbital's shareholders.E) B) and D)
F) A) and D)

Question 17

Accredited investors include banks, but not investment companies.

Accepted Answer

A) True 
 B)False

Question 18

The Securities and Exchange Commission does not regulate the content of proxy statements.

Accepted Answer

A) True 
 B)False

Question 19

Private parties may sue violators of Section 10(b) and Rule 10b-5.

Accepted Answer

A) True 
 B)False

Question 20

Cattle Ranch Company offers its stock for sale only in a single state. The law in Cattle Ranch's state is like the law in most states. Cattle Ranch's offer is subject to state securities statutes that include​

Accepted Answer

A)   ​antifraud and disclosure provisions.
B)   ​antifraud provisions only.
C)   ​disclosure provisions only.
D)   ​neither antifraud nor disclosure provisions.E) A) and B)
F) A) and C)

Exam 30: Investor Protection, Insider Trading, and Corporate Governance

The Securities Exchange Act of 1934 is a one-time disclosure law.

Correct Answer
verified

Social Media Sites Corporation is required to file a registration statement with the Securities and Exchange Commission. This statement must contain

Correct Answer
verified

Trail Bike Corporation is a public company whose shares are traded in the public securities markets. Under the Securities Act of 1933, Trail Bike is required to

Correct Answer
verified
B

Correct Answer
verified
A

Household Products Corporation wants to make an offering of securities to the public. This offering is not exempt from registration under the Securities Act of 1933. Before Household Products sells its securities, it must provide investors with

Correct Answer
verified

Fleet Delivery Corporation is a public company with a market capitalization of less than $75 million. Fleet is poised to issue securities in a transaction that, under the Securities Act of 1933, is "exempt." This enables Fleet to

Correct Answer
verified

Liability can be imposed on those who are negligent in not discovering fraud in connection with a registration statement or prospectus.

Correct Answer
verified

State corporation statues set up the legal framework for corporate governance.

Correct Answer
verified

Rollo is the chief executive officer of Specialty Magazines, Inc., which is required to file certain financial reports with the Securities and Exchange Commission (SEC) . Under the Sarbanes-Oxley Act of 2002, Rollo must

Correct Answer
verified

State securities laws apply mainly to interstatetransactions.

Correct Answer
verified
False

Securities can be sold after the effective date of the registration statement without restrictions.

Correct Answer
verified

Under the Sarbanes-Oxley Act of 2002, chief financial officers must certify the accuracy of information in corporate financial statements and reports that are filed with the Securities and Exchange Commission.

Correct Answer
verified

Global Resources Corporation, and its officers, directors, and shareholders, buy and sell securities. Section 10(b) of the Securities Exchange Act of 1934 applies to the purchase or sale of a security

Correct Answer
verified

Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 apply just to corporate "insiders."

Correct Answer
verified

Correct Answer
verified

Orbital Flights, Inc., is required to register its securities under Section 12 of the Securities Exchange Act of 1934. Section 16(b) of the act covers

Correct Answer
verified

Accredited investors include banks, but not investment companies.

Correct Answer
verified

The Securities and Exchange Commission does not regulate the content of proxy statements.

Correct Answer
verified

Private parties may sue violators of Section 10(b) and Rule 10b-5.

Correct Answer
verified

Cattle Ranch Company offers its stock for sale only in a single state. The law in Cattle Ranch's state is like the law in most states. Cattle Ranch's offer is subject to state securities statutes that include

Correct Answer
verified

Exam 30: Investor Protection, Insider Trading, and Corporate Governance

The Securities Exchange Act of 1934 is a one-time disclosure law.

Correct AnswerverifiedShow Answer

Social Media Sites Corporation is required to file a registration statement with the Securities and Exchange Commission. This statement must contain

Correct AnswerverifiedShow Answer

Trail Bike Corporation is a public company whose shares are traded in the public securities markets. Under the Securities Act of 1933, Trail Bike is required to​

Correct AnswerverifiedB

Correct AnswerverifiedA

Household Products Corporation wants to make an offering of securities to the public. This offering is not exempt from registration under the Securities Act of 1933. Before Household Products sells its securities, it must provide investors with​

Correct AnswerverifiedShow Answer

Fleet Delivery Corporation is a public company with a market capitalization of less than $75 million. Fleet is poised to issue securities in a transaction that, under the Securities Act of 1933, is "exempt." This enables Fleet to​

Correct AnswerverifiedShow Answer

Liability can be imposed on those who are negligent in not discovering fraud in connection with a registration statement or prospectus.

Correct AnswerverifiedShow Answer

State corporation statues set up the legal framework for corporate governance.

Correct AnswerverifiedShow Answer

Rollo is the chief executive officer of Specialty Magazines, Inc., which is required to file certain financial reports with the Securities and Exchange Commission (SEC) . Under the Sarbanes-Oxley Act of 2002, Rollo must

Correct AnswerverifiedShow Answer

State securities laws apply mainly to interstatetransactions.

Correct AnswerverifiedFalse

Securities can be sold after the effective date of the registration statement without restrictions.

Correct AnswerverifiedShow Answer

Under the Sarbanes-Oxley Act of 2002, chief financial officers must certify the accuracy of information in corporate financial statements and reports that are filed with the Securities and Exchange Commission.

Correct AnswerverifiedShow Answer

Global Resources Corporation, and its officers, directors, and shareholders, buy and sell securities. Section 10(b) of the Securities Exchange Act of 1934 applies to the purchase or sale of a security​

Correct AnswerverifiedShow Answer

Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 apply just to corporate "insiders."​

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Orbital Flights, Inc., is required to register its securities under Section 12 of the Securities Exchange Act of 1934. Section 16(b) of the act covers

Correct AnswerverifiedShow Answer

Accredited investors include banks, but not investment companies.

Correct AnswerverifiedShow Answer

The Securities and Exchange Commission does not regulate the content of proxy statements.

Correct AnswerverifiedShow Answer

Private parties may sue violators of Section 10(b) and Rule 10b-5.

Correct AnswerverifiedShow Answer

Cattle Ranch Company offers its stock for sale only in a single state. The law in Cattle Ranch's state is like the law in most states. Cattle Ranch's offer is subject to state securities statutes that include​

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Trail Bike Corporation is a public company whose shares are traded in the public securities markets. Under the Securities Act of 1933, Trail Bike is required to

Correct Answer
verified
B

Correct Answer
verified
A

Household Products Corporation wants to make an offering of securities to the public. This offering is not exempt from registration under the Securities Act of 1933. Before Household Products sells its securities, it must provide investors with

Correct Answer
verified

Fleet Delivery Corporation is a public company with a market capitalization of less than $75 million. Fleet is poised to issue securities in a transaction that, under the Securities Act of 1933, is "exempt." This enables Fleet to

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
False

Correct Answer
verified

Correct Answer
verified

Global Resources Corporation, and its officers, directors, and shareholders, buy and sell securities. Section 10(b) of the Securities Exchange Act of 1934 applies to the purchase or sale of a security

Correct Answer
verified

Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 apply just to corporate "insiders."

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Cattle Ranch Company offers its stock for sale only in a single state. The law in Cattle Ranch's state is like the law in most states. Cattle Ranch's offer is subject to state securities statutes that include

Correct Answer
verified