Quiz Module 3 ?s Flashcards
Which answer best describes a type of financial market?
All of these answers
Money markets
Derivative markets
Capital markets
All of these answers
A company needs funds to expand its business by purchasing new equipment. Which financial market should the company use to raise money?
Money market
Capital market
All of these answers
Derivative market
Capital market
Financial markets can address which problem faced by a company’s management?
Market oscillation
All of these answers
Information asymmetry
Emotional factors among market participants
Information asymmetry
True or False: The U.S. Financial System is composed of financial institutions and markets that allow the exchange of funds between lenders, investors, and borrowers.
True
False
True
Which regulation’s primary purpose is to ensure that buyers of securities receive complete and accurate information before they invest?
The Securities Exchange Act of 1934
The Securities Act of 1933
Rule 144
Regulation S
The Securities Act of 1933
Which statement does not accurately describe the Sarbanes-Oxley Act of 2002?
This act was amended by the Maloney Act, which authorized the formation and registration of national securities associations to supervise the conduct of their members subject to the oversight of the SEC.
As a result of this act, top management must now individually certify the accuracy of financial information.
It is also known as the Public Company Accounting Reform and Investor Protection Act and the Corporate and Auditing Accountability and Responsibility Act.
This act is a federal law that set new or enhanced standards for all public company boards, management, and public accounting firms in the United States.
This act was amended by the Maloney Act, which authorized the formation and registration of national securities associations to supervise the conduct of their members subject to the oversight of the SEC.
According to the Insider Trading Act of 1988, the SEC is allowed to order a penalty of up to how much of the profit of the guilty parties?
Three times the profit
Four times the profit
Six times the profit
Five times the profit
Three times the profit
True or False: Insider trading occurs when a member of an establishment uses information readily available to the public in an attempt to increase his/her wealth through buying or selling stock.
True
False
False
According to the Example Case from the Essential Reading section, a CEO was charged with which crime from the Securities and Exchange Commission (SEC)?
Defrauding seniors by pressuring them to invest
Issuing false claims about its company’s technology
Failing to appear in court on his assigned date
Providing a friend with confidential information about his company’s merger
Providing a friend with confidential information about his company’s merger
