Question

A security is __________________________________________________.

		A. any transaction in which the buyer invests money in a common enterprise and expects to earn a profit predominantly from the efforts of others.
		B. An interest in another person's property that gives present possessory interests in property.
		C. a future interest in a property for the purpose of securing a loan.
		D. collateral

The 1933 act exempts some types of securities from registration because they are __________________________________________________. (NOTE: This is a multiple answer question. Therefore, select all that apply.)

		inherently low risk
		are high risk/high return
		are regulated by other statutes
		are not really investments

Any corportate insider (1) with material, nonpublic information (2) who breaches a fiduciary duty to his company (3) by trading on the information is guilty of insider trading in violation of Section 10(b)

  True

  False

To qualify as an accredited investor an individual must have ___________________________________ or _______________________________. (NOTE: This is a mutiple answer question. Select the two that apply.)

		A. A net worth of more than $5 million.
		B. A net worth (not counting their home) of more than $1 million.
		C. an annual income of more than $1 million
		D. an annual income of more than $200,000

Avantius, Inc. makes a $5 million securities offering under Rule 506 of Regulation D of the Securities Act of 1933. Under this regulation, Avantius is __________________________________.

		A. allowed to make the offering through a general solicitation to both accredited and unaccredited investors
		B. required to provide full financial information to accredited investors only
		C. allowed to sell an unlimited amount of stock
		D. limited to selling to no more than 35 accredited investors

Answer 1

1. Option a, Any transaction in which the buyer invests money in a common enterprise and expects to earn a profit predominantly from the efforts of others.

2. Following are to be selected :

(i)inherently low risk

(ii) are regulated by other statutes

(iii) are not really investments

3. True

4. Following are to be selected :

(i) B. A net worth (not counting their home) of more than $1 million.

D. an annual income of more than $200,000

5. Option ,A. allowed to make the offering through a general solicitation to both accredited and unaccredited investors