RAT Chapter 16 Flashcards
Which answer best describes a scheme involving an investment of money in a common enterprise with profits to come solely from the efforts of others?
It is the test to determine whether an investment constitutes a security.
Which answer best describes what rose post-Civil War and inevitably led to abuses with the concomitant generation of capital?
Big Business.
Which answer best describes the basic purpose of the Securities Act of 1933?
Providing full and fair disclosure of the character of securities.
Which answer best describes the President of the United States who signed the Sarbanes-Oxley Act into law?
George W. Bush
Which answer best describes a booklet given to an investor that provides infomration regarding a company such as its history, business and financial statements?
Prospectus.
Which answer best describes the law that makes it illegal for an accounting firm to provide consulting services to any company for which it is providing audit services?
The Sarbanes-Oxley Act of 2002.
Which answer best describes what, duing the boom years of the 1920s, blunted the drive for Federal regulation and greater regulation by the States?
The general business prosperity of the times.
Which answer best describes what a buyer is entitled to through the private enforcement of the Securities Act of 1933 if an issuer sells unregistered securities?
Damages.
Which answer best describes law passed as a first response to the public demand for regulation of securities?
State Blue Sky Laws.
Which answer best describes value lost by stock in the Enron corporation by comparison with its value of $0.72 on the day it filed for bankruptcy with its value less than a year earlier?
A loss of more than $75 per share.
