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Question 1 of 10
1. Question
Which of the following statements is true regarding Companies exempt from registration?
I. The provides for exemption from registration for a few certain types of companies
II. Investment advisers provide advice solely to venture capital funds
III. Investment advisers are required to be registered under the Act
IV. Investment advisers to private funds with more than $1150 million assets under management are also exempt from registrationCorrect
Companies exempt from registration
The Investment Advisers Act of 1940 provides for exemption from registration for a few certain types of companies. For example, investment advisers that provide advice solely to venture capital funds are required to be registered under the Act. Additionally, investment advisers to private funds with less than $150 million assets under management are also exempt from registration. However, these investment advisers to private funds are required by the Act to provide reporting to the Commission to ensure that the public interest and its investors are sufficiently protected.Incorrect
Companies exempt from registration
The Investment Advisers Act of 1940 provides for exemption from registration for a few certain types of companies. For example, investment advisers that provide advice solely to venture capital funds are required to be registered under the Act. Additionally, investment advisers to private funds with less than $150 million assets under management are also exempt from registration. However, these investment advisers to private funds are required by the Act to provide reporting to the Commission to ensure that the public interest and its investors are sufficiently protected. -
Question 2 of 10
2. Question
Which of the following statements is true regarding Impact of Securities Act of 1933 on marketing and prospecting regulations?
I. The Securities Act of 1933 is also sometimes known as the “truth in securities” act
II. It was designed with five objectives in mind
III. One of the objectives is investors are provided with all relevant information about any securities that are offered for sale
IV. One of the objectives is to prohibit fraudulent activities throughout the marketing and sale of securitiesCorrect
The Securities Act of 1933, which is also sometimes known as the “truth in securities” act, was designed with two objectives in mind: (i) that investors are provided with all relevant information about any securities that are offered for sale and (ii) to prohibit fraudulent activities throughout the marketing and sale of securities.
Incorrect
The Securities Act of 1933, which is also sometimes known as the “truth in securities” act, was designed with two objectives in mind: (i) that investors are provided with all relevant information about any securities that are offered for sale and (ii) to prohibit fraudulent activities throughout the marketing and sale of securities.
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Question 3 of 10
3. Question
Which of the following statements is true regarding Interstate commerce or mail system for selling securities?
I. Section 5 of the Securities Exchange Act of 1933 sets forth several rules and prohibitions
II. These rules and prohibitions are with respect to the use of interstate commerce and the mail service in selling securities
III. The act doesn’t prohibit the use of interstate commerce or the mail system to sell any security
IV. The act prohibits the use of state commerce to buy any securityCorrect
Interstate commerce or mail system for selling securities
Section 5 of the Securities Exchange Act of 1933 sets forth several rules and prohibitions with respect to the use of interstate commerce and the mail service in selling securities. Specifically, the act prohibits the use of interstate commerce or the mail system to sell any security that does not have a registration statement in place.Incorrect
Interstate commerce or mail system for selling securities
Section 5 of the Securities Exchange Act of 1933 sets forth several rules and prohibitions with respect to the use of interstate commerce and the mail service in selling securities. Specifically, the act prohibits the use of interstate commerce or the mail system to sell any security that does not have a registration statement in place. -
Question 4 of 10
4. Question
Which of the following statements is true regarding Prospectus requirements?
I. The prospectus must be submitted along with the registration statement for a security
II. It is not deemed to be part of that registration statement
III. Upon submission, the registrations statement of the security is effective the tenth day after filing
IV. Upon submission, the registrations statement of the security is effective the 20th day after filingCorrect
Prospectus requirements
Pursuant to Section 10 of the Securities Act of 1933, the prospectus must be submitted along with the registration statement for a security, but is not deemed to be part of that registration statement. Upon submission, the registrations statement of the security is effective the twentieth day after filing, or earlier if approved by the Commission.Incorrect
Prospectus requirements
Pursuant to Section 10 of the Securities Act of 1933, the prospectus must be submitted along with the registration statement for a security, but is not deemed to be part of that registration statement. Upon submission, the registrations statement of the security is effective the twentieth day after filing, or earlier if approved by the Commission. -
Question 5 of 10
5. Question
Which of the following statements is true regarding Civil liabilities?
I. The act provides purchases of securities with an avenue for pursuing civil liabilities
II. Investors are granted the opportunity to pursue civil liabilities
III. It is when they have unknowingly purchased a security
IV. An omission of material fact would not be required to make the statements in the registration statementCorrect
Civil liabilities
Section 11 of the Securities Act of 1933 provides purchases of securities with an avenue for pursuing civil liabilities as a result of fraudulent activities. Specifically, investors are granted the opportunity to pursue civil liabilities when they have unknowingly purchased a security that contained in its registration statement an untrue statement of material fact or an omission of material fact that would be required to make the statements in the registration statement not misleading to the investor.Incorrect
Civil liabilities
Section 11 of the Securities Act of 1933 provides purchases of securities with an avenue for pursuing civil liabilities as a result of fraudulent activities. Specifically, investors are granted the opportunity to pursue civil liabilities when they have unknowingly purchased a security that contained in its registration statement an untrue statement of material fact or an omission of material fact that would be required to make the statements in the registration statement not misleading to the investor. -
Question 6 of 10
6. Question
Which of the following statements is true regarding Section 11 of the Securities Act of 1933?
Correct
Section 11 of the Securities Act of 1933 provides that an investor who has purchased a security that in its registration statement contained an untrue
statement or omission of material fact may sue signers of the securities registration statement, directors and partners of the company (both at the time of registration and current), underwriters associated with the distribution of the security, and professionals who gave opinions in the registration statement that led to the untrue claims or omissions of fact.Incorrect
Section 11 of the Securities Act of 1933 provides that an investor who has purchased a security that in its registration statement contained an untrue
statement or omission of material fact may sue signers of the securities registration statement, directors and partners of the company (both at the time of registration and current), underwriters associated with the distribution of the security, and professionals who gave opinions in the registration statement that led to the untrue claims or omissions of fact. -
Question 7 of 10
7. Question
Which of the following statements is false regarding Fraudulent interstate transaction?
Correct
Fraudulent interstate transaction
As provided in Section 17 of the Securities Act of 1933, “It shall be unlawful for any person in the offer or sale of any securities (including security-based swaps) or any security-based swap agreement by the use of any means or instruments of transportation or communication in interstate commerce or by use of the mails, directly or indirectly:
1. To employ any device, scheme, or artifice to defraud, or
2. To obtain money or property by means of any untrue statement of a material
fact or any omission to state a material fact necessary in order to make the
statements made, in light of the circumstances under which they were made,
not misleading, or
3. To engage in any transaction, practice, or course of business which operates
or would operate as a fraud or deceit upon the purchaser.Incorrect
Fraudulent interstate transaction
As provided in Section 17 of the Securities Act of 1933, “It shall be unlawful for any person in the offer or sale of any securities (including security-based swaps) or any security-based swap agreement by the use of any means or instruments of transportation or communication in interstate commerce or by use of the mails, directly or indirectly:
1. To employ any device, scheme, or artifice to defraud, or
2. To obtain money or property by means of any untrue statement of a material
fact or any omission to state a material fact necessary in order to make the
statements made, in light of the circumstances under which they were made,
not misleading, or
3. To engage in any transaction, practice, or course of business which operates
or would operate as a fraud or deceit upon the purchaser. -
Question 8 of 10
8. Question
Which of the following statements is false regarding No approval clause?
Correct
No approval clause
Section 23 of the Securities Act of 1933, often referred to as the “no approval clause,” is meant to indicate to investors that while the SEC is responsible for approving the registration of a security, they are in no way responsible for the truth and accuracy of the registration statement and do not warrant the security as being a good investment.Incorrect
No approval clause
Section 23 of the Securities Act of 1933, often referred to as the “no approval clause,” is meant to indicate to investors that while the SEC is responsible for approving the registration of a security, they are in no way responsible for the truth and accuracy of the registration statement and do not warrant the security as being a good investment. -
Question 9 of 10
9. Question
Which of the following statements is false regarding Prospectus and statement of additional information?
Correct
Prospectus and statement of additional information
The purpose of the prospectus is to ensure that investors have access and are provided with, prior to the purchase of a security, a minimal level of information that is necessary for the investment decision-making process. Such information within the prospectus includes a mutual fund’s objectives, strategy, risks, fees and expenses, and past performance.Incorrect
Prospectus and statement of additional information
The purpose of the prospectus is to ensure that investors have access and are provided with, prior to the purchase of a security, a minimal level of information that is necessary for the investment decision-making process. Such information within the prospectus includes a mutual fund’s objectives, strategy, risks, fees and expenses, and past performance. -
Question 10 of 10
10. Question
Which of the following statements is false regarding Prospectus and statement of additional information?
Correct
Prospectus and statement of additional information
The Securities Act of 1933 provides that any advertisements must notify investors of how to obtain additional information such as the prospectus and statement of additional information and urges investors to consider all of the facts and circumstances of the investment product prior to making a decision. The additional information will be critical to the investment decision because the prospectus provides information such as a mutual fund’s objectives, strategy, risks, fees and expenses, and past performance.Incorrect
Prospectus and statement of additional information
The Securities Act of 1933 provides that any advertisements must notify investors of how to obtain additional information such as the prospectus and statement of additional information and urges investors to consider all of the facts and circumstances of the investment product prior to making a decision. The additional information will be critical to the investment decision because the prospectus provides information such as a mutual fund’s objectives, strategy, risks, fees and expenses, and past performance.