Chapter 3 Practice Questions
1. Which of the following would not be considered a non-exempt issuance of securities?
A. A bank offering CDs to its customers
B. A bank attempting to raise money for expansion by selling shares of ownership that will trade on the NASDAQ
C. A corporation raising money through the sale of its bonds
D. A small business with less than $10,000,000 in sales that is offering ownership opportunities through radio advertisements on the local news radio station
2. Each of the following is considered a security except:
A. Publicly traded stock
B. Publicly traded bond
C. A variable annuity
D. A commodities future
3. Which of the following are found on all registration statements?
I. The type of security being issued
II. The quantity of the security being issued
III. A description of the issuer’s business
IV. The contact information of the issuer
A. I and II only
B. II and III
C. I, II, and III
D. I, II, III, and IV
4. When a security will not be registered at the federal level, the issuer most likely will be required to register the security by:
A. Coordination
B. Qualification
C. Notice filing
D. Examination
5. All of the following are required when an issuer registers by qualification except:
A. Financial statements of the issuer
B. Regulatory and legal history of the issuer
C. A list of all officers owning more than 1% of the issuer’s securities
D. A sample of the actual security
6. Which of the following securities are exempt from state registration requirements?
I. Securities issued by companies that only hold foreign investments
II. Securities of an insurance company licensed to operate in the state
III. U.S. government securities
IV. Securities issued by an out-of-state municipality
A. I and II
B. I and III
C. I, II, and III
D. II, III, and IV
7. All of the following transactions are exempt under Section 402(b) except: