Unit 2 Quick Quizzes/Unit Test

By order and with prompt notice, the Administrator could revoke the exemption of all of the following EXCEPT: a. an Atlanta, Georgia, school district bond b. an unsolicited trade of a common stock traded on the Pink Sheets c. a security issued by a fraternal organization d. a sale made to a bank

A. An Atlanta, Georgia, school district bond

XYZ Corporation has been in business for over 20 years. It needs additional capital for expansion and determines that a public offering in its home state and neighboring states is appropriate. Which method of securities registration most likely would be used to register this initial public offering? a. coordination b. notice filing c. qualification d. any of the above

A. Coordination

Registration statements for securities under the Uniform Securities Act are effective for: a. a period determined by the Administrator for each issue b. 1 year from the effective date c. 1 year from the date of issue d. 1 year from the previous January 1

B. 1 year from the effective date

Most securities must be registered under state laws; however, certain securities are exempt under the act. One of the exemptions is the federal covered security, which covers: I. any security listed on a major stock exchange II. all Nasdaq listed securities III. securities meeting certain financial tests of liquidity and net worth IV. bank and insurance company securities a. I only b. I and II c. I, II and IV d. I and III

B. I and II

Under the USA, all of the following are exempt securities EXCEPT I. US government securities II. unsolicited transactions III. transactions between issuers and underwriters IV. securities of credit unions a. I, II and IV b. I and IV c. II and III d. IV only

C. II and III

Nonexempt securities: a. need not be registered in the state in which they are sold b. always must be registered in the state in which they are sold c. need not be registered if sold in an exempt transaction d. need not be registered if sold in a nonexempt transaction

C. need not be registered if sold in an exempt transaction

Registration is effective when ordered by the Administrator in the case of registration by: a. coordination b. integration c. notice filing d. qualification

D. qualification

Under the Uniform Securities Act, which of the following would be considered an exempt transaction? I. an existing client calls to purchase 1,000 shares of a common stock that is not registered in this state II. the sale to an individual client of shares that are part of a registered secondary of a NYSE-listed company III. the sale of shares of a bank's IPO to an institutional client IV. the sale of shares of an insurance company's IPO to an individual client a. I and III b. I, III and IV c. II and IV d. I, II, III and IV

A. I and III

Under the Uniform Securites Act, an issuer is any person who issues, or proposes to issue, a security for sale to the public. According to the USA, which of the following is(are) NOT an issuer? I. The City of Chicago, which is involved in a distribution of a tax-exempt highway improvement bonds II. a partner in the AAA Oil and Gas Partnership who sells his interest in the investment III. the AAA Manufacturing Company, which proposes to offer shares to the public but has not completed the offering IV. the US government, which proposes to offer Treasury Bonds a. I only b. II only c. I, II and III d. I, II and IV

B. II only

All of the following are exempt transactions EXCEPT: a. transactions by a guardian b. sale of a registered IPO to an individual client c. unsolicited secondary market transactions d. transactions by a broker-dealer with a registered investment company

B. Sale of a registered IPO to an individual client

A nonissuer transaction is a transaction: a. between 2 corporations in which one is issuing the stock and the other is purchasing b. in which the issuing corporation will not receive the proceeds from the transaction c. in which a mutual fund purchases a Treasury bond directly from the government d. in which the security must be registered

B. in which the issuing corporation will not receive the proceeds from the transaction

Which of the following are exempt transactions? I. an agent sells a security issued by a foreign government with which the United States has diplomatic relations to an individual client II. an unsolicited request from an existing client to purchase a nonexempt security III. the sale of an unregistered security in a private, non publicly advertised transaction to 14 non institutional investors over a period not exceeding 12 months IV. the sale of unlisted securities by a trustee in bankruptcy

C. II and IV

Which of the following instruments below is NOT composed of securities? a. stock, treasury stock, rights, warrants, transferrable shares b. voting trust certificates, interests in oil and gas drilling programs c. commodity futures contracts, fixed-payment life insurance contracts d. commodity options contracts, interests in multilevel distributorship arrangements

C. commodity futures contracts, fixed-payment life insurance contracts

In the Howey Case, the US Supreme Court defined an investment contract as having 4 components. Which of the following is NOT part of the 4-part test for an investment contract? a. an investment of money b. an expectation or profit c. management activity by owner d. solely from the efforts of others

C. management activity by owner

All of the following describe exempt transactions EXCEPT: a. ABC, a broker-dealer, purchases securites from XYZ corporation b. First National Bank sells its entire publicly traded bond portfolio to Amalgamated National Bank c. Amalgamated National Bank sells its publicly traded bond portfolio to ABC Insurance Company d. Joe Smith, an employee of Amalgamated Bank, buys securities from ABC Brokerage Corporation

D. Joe Smith, an employee of Amalgamated Bank, buys securities from ABC Brokerage Corporation

Which of the following would be considered exempt transactions under the USA? I. a trustee of a corporation in bankruptcy liquidates securities to satisfy debt holders II. an offer of a securities investment is directed to 10 individuals in the state during a 12-month consecutive period III. an agent frequently engages in nonissue transactions in unregistered securities in his own account IV. agents for an entrepreneur offer reorganization certificates to fewer than 10 investors in the state for a modest commission a. I and II b. I, III and IV c. I and IV d. II and IV

A. I and II

Which of the following meet the USA's definition of an exempt transaction? I. transactions by an executor of an estate II. transactions with an investment company registered under the Investment Company Act of 1940 III. an unsolicited sale of a Bulletin Board stock IV. sale of a new issue to an individual customer a. I and II b. I, II and III c. IV only d. I, II, III and IV

B. I, II and III

Under the Uniform Securities Act, which of the following persons is responsible for proving that a securities issue is exempt from registration? a. underwriter b. issuer c. state administrator d. there is no need to prove eligibility for an exemption

B. issuer

Under the Uniform Securities Act, the Administrator may require an agent to present the prospectus for a new issue to the offeree: a. prior to making the offer b. prior to making the sale c. prior to the effective date of the issue d. once payment has been made

B. prior to making the sale

With regard to the registration requirements of the Uniform Securities Act, which of the following statements are TRUE? I. only the issuer itself can file a registration statement with the administrator II. an application for registration must indicate the amount of securities to be issued in the state III. the administrator may require registrants to file quarterly reports a. I and II b. I and III c. II and III d. I, II, and III

C. II and III

Which of the following is(are) primary transactions? I. John inherited securities of XYZ Corporation from his father who, as a founder of the company, received the shares directly from the company as a result of stock options II. John sold the securities he had inherited from his father to his neighbor, Peter, at the market price without charging a commission III. John's father, a founder of XYZ Corporation, purchased shares of XYZ directly from the corporation after its founding without paying a commission IV. John purchased shares in XYZ corporation in a third-market transaction a. I only b. I and II c. III only d. I, II, III and IV

C. III only

The US Supreme Court in the Howey decision ruled that an instrument that represents the investment of money in a common enterprise with an expectation of profit solely through the managerial efforts of others is a security. According to the Howey decision, the USA would consider which of the following a security? a. purchase a house in a desirable real estate market with the expectation that the house will be resold at a profit within a few years b. purchase of jewelry for speculative purposes as opposed to personal use c. investment in options to acquire a security d. investment in commodities futures

C. investment in options to acquire a security

Which of the following securities is (are) exempt from the registration provisions of the USA? I. common stock issued by a savings and loan association authorized to do business in the state II. general obligation municipal bond III. bond issued by a company that has common stock listed on the Chicago Stock Exchange a. I. only b. II only c. II and III d. I, II and III

D. I, II and III

Which of the following are exempt securities? I. securities guaranteed by domestic banks II. securities issued by the government of Canada III. securities issued exclusively for religious purposes IV. federal covered securities a. I, II and III b. II only c. II and IV d. I, II, III and IV

D. I, II, III and IV

Which of the following securities is(are) exempt from the registration and advertising filing requirements under the USA? I. shares of investment companies registered under the Investment Company Act of 1940 II. shares sold on the Nasdaq stock market III. AAA rated promissory notes of $100,000 that mature in 30 days IV. shares sold on the New York Stock Exchange a. I only b. II, III, and IV c. II and IV d. I, II, III and IV

D. I, II, III and IV

Which of the following securities is NOT exempt from the registration and advertising requirements of the USA? a. shares of Commonwealth Edison, a regulated public utility holding company b. securities issued by the Carnegie Endowment for Peace c. securities issued by a bank that is a member of the Federal Reserve System d. variable annuity contract issued by Metrodental Insurance Co.

D. Variable annuity contract issued by Metrodental Insurance Co.

A primary transaction is: a. the first transaction between two parties in the over the counter market b. a sale between investors of securities traded on the NYSE c. a new offering of an issuer sold to investors d. a secondary market transaction in a security recently offered to the public

C. a new offering of an issuer sold to investors

Which of the following is defined as a security under the Uniform Securities Act? a. a guaranteed, lump sum payment to a beneficiary b. fixed, guaranteed payments made for life or for a specified period c. commodity futures contracts d. an investment contract

D. an investment contract