General Principles Chapter 5

Question 1

Name the three agencies that monitor or oversee commercial banks.

Answer 1

The Federal Deposit Insurance Corporation, the Comptroller of the Currency, and the Federal Reserve Board.

Question 2

This act requires the purchasers of new issues be provided with a detailed prospectus before a transaction. Full and fair disclosure of risks is required.

Answer 2

Securities Act of 1933

Question 3

This act regulates the secondary market, (trading of issued securities). It also created the SEC to create and enforce securities laws.

Answer 3

Securities Act of 1934

Question 4

This act authorized the SEC to regulate unit investment trusts and managed investment companies (closed end, and open in the funds), and the separate accounts that operate in variable life, insurance, and annuities.

Answer 4

Investment Company Act of 1940

Question 5

This act established the entity to supervise securities firms that get into financial difficulties.

Answer 5

Securities Investors Protection Act of 1970

Question 6

This entity insures investors against losses arising from the failure of the brokerage firm not bad investing.

Answer 6

SIPC Securities Investors Protection Corporation

Question 7

An agreement between a buyer and seller on the price of a security which results in a trade

Answer 7

Sale