Quiz Understanding the Financial Planning Certification Exam Part 1 Lesson 12
Quiz Understanding the Financial Planning Certification Exam Part 1 Lesson 12
Multiple Choice Quiz: Securities and Exchange Act of 1933
1. What historical event prompted the enactment of the Securities Act of 1933?
A) The Great Depression
B) The Stock Market Crash of 1929
C) World War II
D) The Roaring Twenties
2. Which of the following is a primary objective of the Securities Act of 1933?
A) To regulate international trade
B) To promote speculative investment
C) To ensure full disclosure and transparency in securities offerings
D) To reduce taxes on capital gains
3. What key documents are required under the Securities Act of 1933 to provide investors with relevant information?
A) Annual reports
B) Registration statement and prospectus
C) Corporate bylaws
D) Shareholder meeting minutes
4. Which transactions are exempt from the provisions of the Securities Act of 1933?
A) Government and municipal issues
B) Insurance company offerings
C) Private placements under Regulation D
D) All of the above
5. What criteria define an accredited investor under Regulation D?
A) Net worth over $100,000
B) Annual income of $100,000
C) Net worth over $1,000,000 excluding the value of the primary residence
D) Annual income of $50,000
6. What is the consequence of non-compliance with the Securities Act of 1933?
A) Tax deductions for the company
B) Legal liabilities and reputational damage
C) Enhanced investor trust
D) Regulatory incentives
7. What is the purpose of the quiet period following an initial public offering (IPO)?
A) To promote speculative trading
B) To restrict insider trading
C) To facilitate underwriter recommendations
D) To encourage immediate stock sales
8. Which of the following statements about Rule 144 is true?
A) It allows unrestricted trading of restricted securities.
B) It restricts trading of control stock.
C) It applies only to secondary offerings.
D) It exempts accredited investors from trading restrictions.
9. What is the primary document used by investors to evaluate a company’s new offering?
A) Red herring
B) Final prospectus
C) Registration statement
D) Preliminary prospectus
10. What is the consequence of a company failing to make full disclosure under the Securities Act of 1933?
A) Enhanced investor confidence
B) Class-action lawsuits
C) Tax benefits
D) Increased stock prices
11. Which organizations are exempt from the provisions of the Securities Act of 1933?
A) Nonprofit educational institutions
B) Farmers cooperatives
C) Bankers acceptances
D) All of the above
12. What is the significance of a registration statement under the Securities Act of 1933?
A) It grants immediate trading rights to investors.
B) It provides full disclosure of risks and information about the issuer.
C) It exempts the company from regulatory oversight.
D) It facilitates tax deductions for investors.
13. What is the maximum number of non-accredited investors allowed in a Regulation D offering?
A) 25
B) 50
C) 35
D) Unlimited
14. Which offering is subject to a 90-day restriction on selling to out-of-state buyers?
A) Interstate offering
B) Intrastate offering
C) Global market offering
D) Private placement offering
15. What is the purpose of Rule 145 under the Securities Act of 1933?
A) To regulate stock splits
B) To facilitate stock dividends
C) To govern reorganizations and mergers
D) To oversee initial public offerings
16. Which statement accurately describes a quiet period following an IPO?
A) It permits unrestricted trading of securities.
B) It restricts insiders from buying company stock.
C) It encourages immediate stock sales.
D) It allows underwriters to recommend the stock.
17. What is the consequence of a company failing to deliver a final prospectus within 90 days of the effective
date?
A) Enhanced investor trust
B) Legal liabilities
C) Tax exemptions
D) Regulatory incentives
18. How does Rule 144 impact trading of restricted stock?
A) It allows immediate public trading.
B) It restricts trading volume and frequency.
C) It exempts insiders from trading restrictions.
D) It imposes tax deductions on investors.
19. What document provides information about a company’s management, financial statements, and risks?
A) Annual report
B) Red herring
C) Final prospectus
D) Preliminary prospectus
20. What is the primary purpose of the Securities Act of 1933?
A) To regulate banking institutions
B) To ensure transparency in securities offerings
C) To promote speculative investments
D) To minimize shareholder rights
Quiz Understanding the Financial Planning Certification Exam Part 1 Lesson 12
Answer Key:
1 What historical event prompted the enactment of the Securities Act of 1933?
B) The Stock Market Crash of 1929
2 Which of the following is a primary objective of the Securities Act of 1933?
C) To ensure full disclosure and transparency in securities offerings
3 What key documents are required under the Securities Act of 1933 to provide investors with relevant information?
B) Registration statement and prospectus
4 Which transactions are exempt from the provisions of the Securities Act of 1933?
D) All of the above
5 What criteria define an accredited investor under Regulation D?
C) Net worth over $1,000,000 excluding the value of the primary residence
6 What is the consequence of non-compliance with the Securities Act of 1933?
B) Legal liabilities and reputational damage
7 What is the purpose of the quiet period following an initial public offering (IPO)?
B) To restrict insider trading
8 Which of the following statements about Rule 144 is true?
A) It allows unrestricted trading of restricted securities.
9 What is the primary document used by investors to evaluate a company’s new offering?
B) Final prospectus
10 What is the consequence of a company failing to make full disclosure under the Securities Act of 1933?
B) Class-action lawsuits
11 Which organizations are exempt from the provisions of the Securities Act of 1933?
D) All of the above
12 What is the significance of a registration statement under the Securities Act of 1933?
B) It provides full disclosure of risks and information about the issuer.
13 What is the maximum number of non-accredited investors allowed in a Regulation D offering?
C) 35
14 Which offering is subject to a 90-day restriction on selling to out-of-state buyers?
A) Interstate offering
15 What is the purpose of Rule 145 under the Securities Act of 1933?
C) To govern reorganizations and mergers
16 Which statement accurately describes a quiet period following an IPO?
D) It allows underwriters to recommend the stock.
17 What is the consequence of a company failing to deliver a final prospectus within 90 days of the effective date?
B) Legal liabilities
18 How does Rule 144 impact trading of restricted stock?
B) It restricts trading volume and frequency.
19 What document provides information about a company’s management, financial statements, and risks?
D) Preliminary prospectus
20 What is the primary purpose of the Securities Act of 1933?
B) To ensure transparency in securities offerings
End Of Quiz Understanding the Financial Planning Certification Exam Part 1 Lesson 12
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