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| 1 | |
Physically, a security __________. |
| | A) | Does not exist |
| | B) | Is an artificial construct |
| | C) | Is merely a piece of paper |
| | D) | Is backed by the "full faith and credit" of the United States government |
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| 2 | |
The Securities Act of __________ regulates how companies issue corporate securities, while the Securities Exchange Act of __________ oversees the purchase and sale of securities. |
| | A) | 1929, 1930 |
| | B) | 1933, 1934 |
| | C) | 1933, 1943 |
| | D) | None of the above |
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| 3 | |
Which of the following is not a responsibility of the Securities and Exchange Commission? |
| | A) | It is responsible for the enforcement of securities laws |
| | B) | It interprets the securities acts and adopts rules to achieve the purposes of the acts |
| | C) | It is responsible for policing and enforcing the "fairness" doctrine |
| | D) | It regulates the activities of securities brokers, dealers, and advisers |
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| 4 | |
The "registration statement" generally contains all but which of the following? |
| | A) | A description of the securities offered for sale |
| | B) | An explanation of how proceeds from the sale of securities will be used |
| | C) | A description of the registrant's business and properties |
| | D) | The mission statement of the corporation |
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| 5 | |
A __________ prospectus is a prospectus with a warning written in __________ print at the top of the page warning investors that the registration statement has been filed with the Securities and Exchange Commission but not yet approved. |
| | A) | Scarlet pimpernel, red |
| | B) | Red herring, red |
| | C) | Red storm, red |
| | D) | None of the above |
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| 6 | |
The Securities and Exchange Commission defines an accredited investor as which of the following? |
| | A) | Any natural person who has a net worth of at least $1 million |
| | B) | Any natural person who has a net worth of at least $2 million |
| | C) | Any natural person who has a net worth of at least $3 million |
| | D) | Any natural-born citizen of the United States |
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| 7 | |
In a __________ defense, the defendant demonstrates that he/she investigated the registration statement and had reasonable grounds to believe that the registration statement was accurate and had no legal omission of material facts. |
| | A) | Due diligence |
| | B) | Due care |
| | C) | Due-on-payment |
| | D) | None of the above |
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| 8 | |
When a company employee or executive uses material inside information to make a profit, he/she is engaging in __________. |
| | A) | An "inside job" |
| | B) | "Inside-the-park" scoring |
| | C) | Insider trading |
| | D) | Internal misfeasance |
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| 9 | |
__________ theory holds that if an individual wrongfully acquires and uses inside information for trading for his or her personal gain, the individual is liable for insider trading. |
| | A) | Misfeasance |
| | B) | Malfeasance |
| | C) | Misallocation |
| | D) | Misappropriation |
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| 10 | |
The __________ theory holds that any individual who acquires material inside information as a result of an insider's breach of duty has engaged in insider trading. |
| | A) | Grantor/grantee |
| | B) | Tipper/tippee |
| | C) | Obligor/obligee |
| | D) | Promisor/promisee |
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