Question 1

A well-known seasoned investor has less flexibility in filing registration statements and using free-writing prospectuses than other issuers.

Accepted Answer

A) True 
 B)False

Question 2

Small-business issues can use an integrated registration and reporting system that requires simpler forms than the full registration system.

Accepted Answer

A) True 
 B)False

Question 3

Karin,an officer for LNG Corporation,buys 10,000 shares of its stock.One week later,LNG announces that it will merge with a competitor,Mining & Piping Company,and the price of LNG stock increases.One month later,Karin sells her shares for a profit.Under Section 16(b) of the Securities Exchange Act of 1934,Karin would not be liable if,after buying the stock,she had waited​

Accepted Answer

A)  less than fourteen days to sell it.
B)  more than six months to sell it.
C)  ninety days to sell it.
D)  two months to sell it.E) A) and B)
F) None of the above

Question 4

Anyone who wrongfully obtains inside information and trades on it for his or her personal gain can be liable under SEC Rule 10b-5.

Accepted Answer

A) True 
 B)False

Question 5

Fact Pattern 28-1
College Bound,Inc. ,markets test and study prep materials and courses.College Bound wants to make an initial public offering of securities.The firm believes that it qualifies for an exemption under Regulation A from the full registration requirement of the Securities Act of 1933.
-Refer to Fact Pattern 28-1.College Bound decides to sell its new securities via the Internet.Most likely,this offering​

Accepted Answer

A)  will avoid high expenses.
B)  is an investment scam.
C)  is a Ponzi scheme.
D)  constitutes insider trading.E) A) and B)
F) A) and C)

Question 6

Paddle & Portage 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) C) and D)
F) A) and B)

Question 7

The Securities Exchange Act of 1934 applies to all cases involving the trading of securities,except in private transactions.

Accepted Answer

A) True 
 B)False

Question 8

Scienter is not required to impose criminal sanctions under Section 10(b)of the Securities Exchange Act of 1934 and SEC Rule 10b-5.

Accepted Answer

A) True 
 B)False

Question 9

Beachware,Inc. ,wants to issue stock of $4 million in a single offering.The corporation must provide disclosure documents that generally are the same as those used in registered offerings to​

Accepted Answer

A)  all investors and the Securities and Exchange Commission.
B)  the Securities and Exchange Commission.
C)  any accredited investors.
D)  any unaccredited investors.E) None of the above
F) A) and B)

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

The key to liability under Section 10(b)of the Securities Exchange Act of 1934 and SEC Rule 10b-5 is whether information omitted or misrepresented in connection with the purchase or sale of a security is material.

Accepted Answer

A) True 
 B)False

Question 12

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 13

A Ponzi scheme is a fraudulent investment that pays returns from new capital invested with the fraudsters instead of from a legitimate investment.

Accepted Answer

A) True 
 B)False

Question 14

Bernie is the chief executive officer of Cooking Network,Inc. ,which is required to file certain financial reports with the Securities and Exchange Commission (SEC) .Under the Sarbanes-Oxley Act of 202,Bernie 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) A) and B)
F) B) and C)

Question 15

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

Question 16

Fact Pattern 28-2
Ben,an accountant for AirLift,Inc. ,a ride service,learns of undisclosed company plans to distribute a new app.Ben buys 10,000 shares of AirLift stock.He reveals the company plans to Carly,who buys 5,000 shares.Carly tells Don,who tells Erwin,and each buys 1,000 shares.They know that Carly got her information from Ben.When AirLift publicly announces its new app,Ben,Carly,Don,and Erwin sell their stock for a profit.
-Refer to Fact Pattern 28-2.Under the Securities Exchange Act of 1934,Carly is most likely​

Accepted Answer

A)  liable for insider trading.
B)  not liable because Carly did not prevent others from profiting.
C)  not liable because Carly did not solicit information from Ben.
D)  not liable because Carly does not work for AirLift.E) A) and B)
F) A) and C)

Question 17

Insider trading occurs when persons buy or sell securities on the basis of information that is not available to the pubic.

Accepted Answer

A) True 
 B)False

Question 18

State securities laws apply mainly to intrastate transactions.

Accepted Answer

A) True 
 B)False

Question 19

Fact Pattern 28-1
College Bound,Inc. ,markets test and study prep materials and courses.College Bound wants to make an initial public offering of securities.The firm believes that it qualifies for an exemption under Regulation A from the full registration requirement of the Securities Act of 1933.
-Refer to Fact Pattern 28-1.If College Bound is exempt from the federal registration requirement,the firm 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) None of the above
F) C) and D)

Question 20

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

Exam 28: Investor Protection and Corporate Governance

Correct Answer
verified

The key to liability under Section 10(b)of the Securities Exchange Act of 1934 and SEC Rule 10b-5 is whether information omitted or misrepresented in connection with the purchase or sale of a security is material.

Correct Answer
verified

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 Answer
verified

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

Correct Answer
verified

Correct Answer
verified

A well-known seasoned investor has less flexibility in filing registration statements and using free-writing prospectuses than other issuers.

Correct Answer
verified

Bernie is the chief executive officer of Cooking Network,Inc. ,which is required to file certain financial reports with the Securities and Exchange Commission (SEC) .Under the Sarbanes-Oxley Act of 202,Bernie must

Correct Answer
verified

The Securities Exchange Act of 1934 applies to all cases involving the trading of securities,except in private transactions.

Correct Answer
verified

Beachware,Inc. ,wants to issue stock of $4 million in a single offering.The corporation must provide disclosure documents that generally are the same as those used in registered offerings to

Correct Answer
verified

Scienter is not required to impose criminal sanctions under Section 10(b)of the Securities Exchange Act of 1934 and SEC Rule 10b-5.

Correct Answer
verified

Small-business issues can use an integrated registration and reporting system that requires simpler forms than the full registration system.

Correct Answer
verified

Correct Answer
verified

State securities laws apply mainly to intrastate transactions.

Correct Answer
verified

Paddle & Portage 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 Answer
verified

A Ponzi scheme is a fraudulent investment that pays returns from new capital invested with the fraudsters instead of from a legitimate investment.

Correct Answer
verified

Insider trading occurs when persons buy or sell securities on the basis of information that is not available to the pubic.

Correct Answer
verified

Anyone who wrongfully obtains inside information and trades on it for his or her personal gain can be liable under SEC Rule 10b-5.

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

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 Answer
verified

Exam 28: Investor Protection and Corporate Governance

Correct AnswerverifiedShow Answer

The key to liability under Section 10(b)of the Securities Exchange Act of 1934 and SEC Rule 10b-5 is whether information omitted or misrepresented in connection with the purchase or sale of a security is material.

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

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A well-known seasoned investor has less flexibility in filing registration statements and using free-writing prospectuses than other issuers.

Correct AnswerverifiedShow Answer

Bernie is the chief executive officer of Cooking Network,Inc. ,which is required to file certain financial reports with the Securities and Exchange Commission (SEC) .Under the Sarbanes-Oxley Act of 202,Bernie must​

Correct AnswerverifiedShow Answer

The Securities Exchange Act of 1934 applies to all cases involving the trading of securities,except in private transactions.

Correct AnswerverifiedShow Answer

Beachware,Inc. ,wants to issue stock of $4 million in a single offering.The corporation must provide disclosure documents that generally are the same as those used in registered offerings to​

Correct AnswerverifiedShow Answer

Scienter is not required to impose criminal sanctions under Section 10(b)of the Securities Exchange Act of 1934 and SEC Rule 10b-5.

Correct AnswerverifiedShow Answer

Small-business issues can use an integrated registration and reporting system that requires simpler forms than the full registration system.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

State securities laws apply mainly to intrastate transactions.

Correct AnswerverifiedShow Answer

Paddle & Portage 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

A Ponzi scheme is a fraudulent investment that pays returns from new capital invested with the fraudsters instead of from a legitimate investment.

Correct AnswerverifiedShow Answer

Insider trading occurs when persons buy or sell securities on the basis of information that is not available to the pubic.

Correct AnswerverifiedShow Answer

Anyone who wrongfully obtains inside information and trades on it for his or her personal gain can be liable under SEC Rule 10b-5.

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

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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Bernie is the chief executive officer of Cooking Network,Inc. ,which is required to file certain financial reports with the Securities and Exchange Commission (SEC) .Under the Sarbanes-Oxley Act of 202,Bernie must

Correct Answer
verified

Correct Answer
verified

Beachware,Inc. ,wants to issue stock of $4 million in a single offering.The corporation must provide disclosure documents that generally are the same as those used in registered offerings to

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Paddle & Portage 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 Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

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 Answer
verified