Question 1

The sale and transfer of securities are heavily regulated by federal and state statutes and by government agencies.

Accepted Answer

A) True 
 B)False

Question 2

Sun & Ski Tours Corporation is poised to issue securities that,under the Securities Act of 1933,are "exempt." This means that the securities can be sold

Accepted Answer

A)  on the basis of a material omission or misrepresentation.
B)  on the basis of nonpublic information.
C)  within any six-month period by certain insiders.
D)  without being registered.E) B) and D)
F) B) and C)

Question 3

For a defendant to be convicted in a criminal prosecution under the securities laws,there can be no reasonable doubt that the defendant knew he or she was acting wrongfully.

Accepted Answer

A) True 
 B)False

Question 4

If a security does not qualify for an exemption,an issuer cannot offer it to the public.

Accepted Answer

A) True 
 B)False

Question 5

Global Trade Corporation is a public company that is poised to issue securities that do not qualify for an exemption from registration. This means that Global Trade must

Accepted Answer

A)  file a registration statement with the SEC.
B)  issue the securities through an online registration site.
C)  refrain from issuing the securities to unregistered investors.
D)  register the securities with a national stock exchange.E) A) and B)
F) A) and D)

Question 6

Space Trips Inc. files a registration statement with the SEC before making an offering to the general public. The registration contains false,immaterial statements of which the investors are unaware. Space Trips is charged with violating the Securities Act of 1933. Space Trips's best defense is

Accepted Answer

A)  the investors were not aware of the misrepresentations.
B)  the issuer reasonably believed the misstatements were true.
C)  the offering was made available to the general public.
D)  the untrue statements were not material.E) A) and B)
F) A) and C) D

Question 7

OnSpec,Inc.,and its officers,directors,and shareholders,buy and sell securities. Section 16(b) of the Securities Exchange Act of 1934 covers purchases and sales of securities involving

Accepted Answer

A)  corporate insiders.
B)  misappropriation.
C)  short-swing profits.
D)  tippers and tippees.E) A) and B)
F) A) and C) C

Question 8

Most securities can be resold without registration.

Accepted Answer

A) True 
 B)False

Question 9

Most private,midsize-business,non investment company offers of securities are not exempt from the registration requirements.

Accepted Answer

A) True 
 B)False

Question 10

Every state has its own corporate securities laws that regulate the offer and sale of securities within tis borders.

Accepted Answer

A) True 
 B)False

Question 11

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) A) and D)
F) All of the above

Question 12

Accredited investors include banks,but not investment companies.

Accepted Answer

A) True 
 B)False

Question 13

Grain Mills Corporation is required to register its securities under Section 12 of the Securities Exchange Act of 1934. Section 14(a) of the act regulates

Accepted Answer

A)  the declaration of dividends by Grain Mills's board of directors.
B)  the later re-registration of Grain Mills's securities.
C)  the short-swing activities of Grain Mills's insiders.
D)  the solicitation of proxies from Grain Mills's shareholders.E) None of the above
F) C) and D)

Question 14

Securities offerings in unlimited amounts can be exempt from the registration requirements in certain circumstances.

Accepted Answer

A) True 
 B)False

Question 15

The definition of security in the Securities Act of 1933 does not include instruments commonly known as securities.

Accepted Answer

A) True 
 B)False

Question 16

In the context of Section 16(b)of the Securities Exchange Act of 1934,insiders include officers,directors,and large stockholders of Section 12 corporations.

Accepted Answer

A) True 
 B)False  True

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

HVAC Heating & Air Conditioning,Inc.,is a public company whose shares are traded in the public securities markets. Under the Sarbanes-Oxley Act of 2002,to ensure that HVAC's financial results are accurate and timely,the firm's senior officers must set up and maintain

Accepted Answer

A)  internal "disclosure controls and procedures."
B)  external "release and reveal timetables."
C)  personal "peruse and review liability policies."
D)  public "information and discussion forums."E) B) and C)
F) A) and B)

Question 19

Fresh Fruit Company has assets of less than $10 million and fewer than fifty shareholders. Gourmand Pastries,Inc.,has assets of more than $50 million and more than five hundred shareholders. The Securities Exchange Act of 1934 applies to

Accepted Answer

A)  Fresh Fruit and Gourmand Pastries.
B)  Fresh Fruit only.
C)  Gourmand Pastries only.
D)  neither Fresh Fruit nor Gourmand Pastries.E) None of the above
F) A) and B)

Question 20

Lyman is the chief financial officer of Moneysworth Corporation,which is required to file certain financial statements with the Securities and Exchange Commission (SEC) . Under the Sarbanes-Oxley Act of 2002,Lyman must personally

Accepted Answer

A)  certify that the statements are accurate.
B)  delegate the responsibility for preparing the statements.
C)  deliver the statements to the appropriate SEC officer.
D)  prepare the statements.E) C) and D)
F) B) and D)

Exam 36: Investor Protection, insider Trading, and Corporate Governance

The sale and transfer of securities are heavily regulated by federal and state statutes and by government agencies.

Correct AnswerverifiedShow Answer

Sun & Ski Tours Corporation is poised to issue securities that,under the Securities Act of 1933,are "exempt." This means that the securities can be sold

Correct AnswerverifiedShow Answer

For a defendant to be convicted in a criminal prosecution under the securities laws,there can be no reasonable doubt that the defendant knew he or she was acting wrongfully.

Correct AnswerverifiedShow Answer

If a security does not qualify for an exemption,an issuer cannot offer it to the public.

Correct AnswerverifiedShow Answer

Global Trade Corporation is a public company that is poised to issue securities that do not qualify for an exemption from registration. This means that Global Trade must

Correct AnswerverifiedShow Answer

Space Trips Inc. files a registration statement with the SEC before making an offering to the general public. The registration contains false,immaterial statements of which the investors are unaware. Space Trips is charged with violating the Securities Act of 1933. Space Trips's best defense is

Correct AnswerverifiedD

OnSpec,Inc.,and its officers,directors,and shareholders,buy and sell securities. Section 16(b) of the Securities Exchange Act of 1934 covers purchases and sales of securities involving

Correct AnswerverifiedC

Most securities can be resold without registration.

Correct AnswerverifiedShow Answer

Most private,midsize-business,non investment company offers of securities are not exempt from the registration requirements.

Correct AnswerverifiedShow Answer

Every state has its own corporate securities laws that regulate the offer and sale of securities within tis borders.

Correct AnswerverifiedShow Answer

Under the Securities Exchange Act of 1934,Giselle is most likely

Correct AnswerverifiedShow Answer

Accredited investors include banks,but not investment companies.

Correct AnswerverifiedShow Answer

Grain Mills Corporation is required to register its securities under Section 12 of the Securities Exchange Act of 1934. Section 14(a) of the act regulates

Correct AnswerverifiedShow Answer

Securities offerings in unlimited amounts can be exempt from the registration requirements in certain circumstances.

Correct AnswerverifiedShow Answer

The definition of security in the Securities Act of 1933 does not include instruments commonly known as securities.

Correct AnswerverifiedShow Answer

In the context of Section 16(b)of the Securities Exchange Act of 1934,insiders include officers,directors,and large stockholders of Section 12 corporations.

Correct AnswerverifiedTrue

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

Correct AnswerverifiedShow Answer

HVAC Heating & Air Conditioning,Inc.,is a public company whose shares are traded in the public securities markets. Under the Sarbanes-Oxley Act of 2002,to ensure that HVAC's financial results are accurate and timely,the firm's senior officers must set up and maintain

Correct AnswerverifiedShow Answer

Fresh Fruit Company has assets of less than $10 million and fewer than fifty shareholders. Gourmand Pastries,Inc.,has assets of more than $50 million and more than five hundred shareholders. The Securities Exchange Act of 1934 applies to

Correct AnswerverifiedShow Answer

Lyman is the chief financial officer of Moneysworth Corporation,which is required to file certain financial statements with the Securities and Exchange Commission (SEC) . Under the Sarbanes-Oxley Act of 2002,Lyman must personally

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
D

Correct Answer
verified
C

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
True

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified