Ram 75.doc

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1. Frank, an officer of Gyra Gizmo, Inc., learns that Gyra has developed a new source of energy. Frank tells Huey, an outsider. They each buy Gyra stock. When the development is announced, the stock price increases, and they each immediately sell their stock. Subject to liability for insider trading (Points : 1)
are Frank and Huey.
is Frank only.
is Huey only
is Gyra, but neither Frank nor Huey.
2. Elmo, a director of Far East Development Company, learns that a Far East engineer has developed a new, improved product. Over the next six months, Elmo buys and sells Far East stock for a profit. Of Elmo’s profit, Far East may recapture (Points : 1)
all.
half.
10 percent.
none.
3. Centro Associates sells securities. The definition of a security does not include, as an element, (Points : 1)
an investment.
a common enterprise.
a reasonable expectation of profits.
profits derived entirely from the efforts of the investor.
4. Superior, Inc., is a private, noninvestment company. In one year, Superior advertises a $300,000 offering. Concerning registration, this offering is (Points : 1)
exempt because of the low amount of the issue.
exempt because it was advertised.
exempt because the issuer is a private company.
not exempt.
5. Huron, Inc., makes a $6 million private offering to twenty accredited investors and less than thirty unaccredited investors. Huron advertises the offering and believes that the unaccredited investors are sophisticated enough to evaluate the investment. Huron gives material information about itself, its business, and the securities to all investors. Concerning registration, this offering is (Points : 1)
exempt because of the low amount of the issue.
exempt because it was advertised.
exempt because the issuer believed that the unaccredited investors were sophisticated enough to evaluate the investment.
not exempt.
6. Ontario, Inc., in one year, advertises two $2.25 million offerings. Buying the stock are twelve accredited investors. Concerning registration, this offering is (Points : 1)
exempt because of the low amount of the issue.
exempt because it was advertised.
exempt because only accredited investors bought stock.
not exempt.
7. Fat City Games, Inc.’s registration statement must include (Points : 1)
a description of the accounting firm that audits Fat City.
a description of the security being offered for sale.
a financial forecast for Fat City’s next five years.
a marketing and management plan to ensure Fat City’s success.
8. Natural Soy, Inc., wants to make an offering of securities to the public. The offer is not exempt from registration. Before Natural Soy sells these securities, it must provide investors with (Points : 1)
a marketing and management plan.
a prospectus.
a registration statement.
samples of its products.
9. Based a Sample CPA Question. Under the Securities Exchange Act of 1934, the Securities and Exchange Commission is responsible for all of the following activities EXCEPT (Points : 1)
investigating securities fraud.
prosecuting criminal violations of federal securities laws.
regulating the activities of securities brokers.
requiring disclosure of facts concerning offerings of securities listed on national securities exchanges.
10. Great Lakes Company is a private, noninvestment company. Last year, as part of a $250,000 advertised offering, Great Lakes sold stock to Jon, a private investor. Jon would now like to sell the shares. Concerning registration, this resale is (Points : 1)
exempt because of the low amount of the original issue.
exempt because the offering was advertised.
exempt because all resales are exempt.
not exempt.