Question

Which of the following is an element of the Securities Exchange Act of 1934?

The Act authorized the formation and registration of national securities associations.

All of these answers.

The Act establishes the regulatory rules that apply to security exchanges.

The Act requires that companies that have publicly traded stock provide financials.

If a market is "informationally efficient," ______.

one can predict with certainty what the market will do in the future.

All of these answers.

the market is "macro efficient."

one cannot consistently achieve returns in excess of average market returns.

Which of the following is a restriction imposed on market actors by the Securities Act of 1933?

Most securities sold in the US must be registered by filing a registration statement with the SEC.

All of these answers.

A company does not have to register if the issue in question is less than 10% of the outstanding stock.

A security does not have register if the sale occurs outside the US and the issuer does not engage in "directed selling efforts."

A company buys a $1000 corporate bond that pays 10% per year. The inflation rate is 3%. What is its dollar return on the investment after three years?

$225

$331

$210

$300

Answer 1

Answer All of these

The Act governs the trading of securities in secondary market and provides for registration, regulation, of national security associations and various companies and set the regulatory rules.

Answer All of these.

If a market is informationally efficient, then one can predict the movement of securities as all infomration is available and no one can achieve consistently higher return. It is macro efficient.

Answer All of These

The Securities Act 1933 impose all of the above restrictions.

Answer $210

Real rate of interest = Nominal Rate - Inflation rate = 10 - 3 = 7%.

So the bond return will be 1000*7% = $ 70 per year

and 70*3 = $210 after three years