Chapter 14

Question 1

What is laissez-faire economic policy?

Answer 1

When we had limited regulation in the 1930. It describes an economic philosophy that markets function best when left to their own devices.

Question 2

What is the minimum asset amount to have register with the SEC?

Answer 2

10 million

Question 3

How many owners trigger SEC registration?

Answer 3

5 hundred

Question 4

Insider trading requires the possession of nonpublic information for a violation to occur. True or false.

Answer 4

True

Question 5

Insider trading violations can result in fines but not criminal punishment. True or false?

Answer 5

False, it result in criminal punishment.

Question 6

What is insider trading?

Answer 6

The buying or selling of a security, in breach of a fiduciary duty or other relationship of trusted and confidence, on the basis of material nonpublic, information about the security.

Question 7

Which types of companies must register with the SEC?

Answer 7

Companies with the total assets exceeding $10 million and with 500 or more owners.

Question 8

Explain Blue Sky laws.

Answer 8

State level laws aimed at companies fraud in investing and trading.

Question 9

All of the following are considered reports required by the Securities Exchange Act of 1934 except:
- form 8k
- form 10k
- form 10Q
- all of the above

Answer 9

all of the above

Question 10

What’s the purpose of proxy statement?

Answer 10

For voting at meetings

Question 11

Distinguish between primary markets and secondary markets.

Answer 11

The stock market is a secondary market. Secondary sales subject to constantly changing valuations.
Primary market is the initial sale of security - IPO.