C214 - 15

What does a "safe harbor" to the 1933 Act provide? · Allows firms to sell private equity without registration with the SEC · Restricts sale of shares to accredited investors only · Defines accredited investors as those with a net worth greater than $1 million · Defines accredited investors as those with an annual income of $200K/year or a combined annual income of $300k/year · All of these choices

All of these choices

Who is NOT subject to FINRA regulation? · Corporations that trade in equity, bond or futures markets that are not regulated by another self-regulatory organization · Brokerage firms · Exchange markets · All of these choices are subject to FINRA regulation · None of these choices are subject to FINRA regulation

All of these choices are subject to FINRA regulation

Which of the following is not one of the ways the Dodd Frank Act monitors capital markets? · Regulate types of assets banks can hold · Monitor insurance industry · Assign a CAMELS score to bank · Monitor hedge fund industry · Systematic risk analysis

Assign a CAMELS score to bank

Which of the following is NOT part of the Sarbanes-Oxley Act: · Holds top management responsible for accurate accounting reports · Disciplines accounting firms for oversight of compliance issues · Assigns new responsibilities to board members · Requires external audits of financial statements · Assigns specific accounting firms to audit a firm based on its industry

Assigns specific accounting firms to audit a firm based on its industry

Dodd-Frank regulates which segment of the U.S. economy? · Automobile industry · Banking industry · Multilevel marketing industry · Fannie Mae and Freddie Mac (housing financing)

Banking industry

What is FINRA's primary purpose? · Assist firms in their IPO · Ensure the securities industry is fair and honest · Help brokers pass licensing exams · Keep investors informed of changes in the market · Report incompliant firms to exchange markets

Ensure the securities industry is fair and honest

A prospectus is separate from the SEC filing. T/F

False

The Dodd Frank Act loosens regulations for banks. T/F

False

Which of the following committees was created as a direct result of the Dodd Frank Act? · Financial Industry Regulatory Authority · Depository Institutions Deregulation Council · Monetary Control Committee · Financial Stability Oversight Council · Securities and Exchange Commission

Financial Stability Oversight Council

FINRA is a division of the federal government T/F

Flase

Which of the following Acts loosened the regulation on types of products financial institutions could offer? · Bank Holding Company Act of 1956 · Glass-Steagall Banking Act of 1933 · Garn-St. Germain Act of 1982 · Depository Institutions Deregulation and Monetary Control Act of 1980 · Federal Reserve Act of 1913

Garn-St. Germain Act of 1982

Which of the following acts limited types of products a consumer bank could offer or hold, creating a wall between commercial banks and investment banks? · Glass-Steagall Banking Act of 1933 · Bank Holding Company Act of 1956 · Depository Institutions Deregulation and Monetary Control Act of 1980 · Garn-St. Germain Act of 1982 · Federal Reserve Act of 1913

Glass-Steagall Banking Act of 1933

The Securities and Exchange Commission (SEC) requires companies to do the following: (Choose two) · Change CEOs on a regular basis. · Regulate the money supply · Prohibit foreign bribery · Register all public offerings. · Regulate stock sales

Register all public offerings

The "Wildcat Banking" era lead the government to regulate the banking industry in the US. Which of the following acts was instituted in an effort to help prevent bank runs: · McFadden Act of 1927 · Glass-Steagall Banking Act of 1933 · Federal Reserve Act of 1913 · National Banking Act of 1863 · Bank Holding Company Act of 1956

National Banking Act of 1863

A prospectus contains all of the following except: · The name(s) of underwriter facilitating the offering · Detailed information about the securities offered · Audited financial statements · Price and number of shares offering will include · Pro forma statements supporting the need for capital

Pro forma statements supporting the need for capital

All firms that wish to make an initial public offering of equity or debt for non-accredited investors must first file public disclosure data with the SEC. TrueFalse

True

Some analysts argue that the expense of SOX in both time and money has caused the number of public firms in the US to decrease. T/F

True

The final price and number of shares can be changed as late as the morning of the offering. T/F

True

Which of the following is NOT a provision of SOX: · No retaliation against whistleblowers · Disclosure of off-balance sheet items · Control of compensation for top management · Information transparency · Approved/proper audits

· Control of compensation for top management

What does the Sarbanes-Oxley Act require companies to do? · Have internal control audits. · Make estimated tax payments. · Register all foreign sales. · Have a board of directors.

· Have internal control audits.

Financial Industry Regulatory Authority (FINRA) does the following: (Choose one) · Prosecutes corrupt stock brokers · Regulates hedge funds · Establishes Credit Unions · Regulates bond prices · Prohibits foreign bribery by corporations

· Prosecutes corrupt stock brokers

What is the primary objective of the SEC? · To protect investors by ensuring public firms provide adequate information · To separate insurance offerings from equity offerings · To deregulate financial markets · To make it difficult for corporations to make equity offerings · To overwrite statutes that regulate markets

· To protect investors by ensuring public firms provide adequate information