Securities and Antitrust Law Chapter Exam

Exam Instructions:

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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Question 1 1. Sam, Mike, and Maurice all own drywall companies. They want to be able to win every bid. They decide that one of them will submit a low bid, while the other two submit higher prices. They take turns doing this, so each of them will get the job at some point in time. What is this called?

Question 2 2.

ABC Company issued securities, which John then purchased in a secondary market.

Which of the following is correct?

Question 3 3. Which rule applies to interstate sales of securities?

Question 4 4. All securities, whether exempt or not must adhere to:

Question 5 5. It has been determined that Zac & Co., Inc disclosed material information in a prospectus that was incorrect. Zac & Co., Inc could be sued to court by using section _____ of the Securities Act of 1933.

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Question 6 6. One of the most important purposes of the Sherman Antitrust Act is to:

Question 7 7.

The Securities Act of 1933 Section 10(b)(5) addresses insider trading by deeming it illegal for anyone, whether directly or indirectly, in any way:

1. Unintentionally commits a fraud

2. Makes untrue statements or misrepresent financial information

3. Operates a fraud against another person when buying securities

Question 8 8. Simon was tried and convicted of insider trading. The judge said that Simon would be disgorged of his profits. What does this mean?

Question 9 9. Millie and Stone are the only two gas stations in Millstone, U.S. If Millie and Stone conspire to raise gas prices to $3.98 per gallon while a concert is in town, they are messing with the natural ebb and flow of supply and demand. In other words, customers may need to fill up when they arrive or before they leave the concert. They are given no choice but to pay a , or unfairly inflated price, for their fuel.

Question 10 10. An investor sues a company because there was a sale of non-exempt security that has not been registered. The investor is suing under of .

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Question 11 11. The Securities Act of 1933 ensures that:

Question 12 12. Under Rule 506, how many non-accredited investors can an exempt security be sold to?

Question 13 13. Kodak developed Kodacolor film. Only Kodak could develop this film. They even charged a special fee above the processing fee for developing photos. This was in violation of the because it created a monopoly for the company.

Question 14 14. The act that regulates fair competition by enlisting the help of the Federal Trade Commission is the:

Question 15 15.

C-U-LAT*R Corporation is told it is required that the sale of its securities be to a savvy investor. It must be in compliance of:

1. Regulation D

2. Rule 505

3. Rule 506

4. Antifraud Rule

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Question 16 16. Kenneth was walking past a closed office door when he heard a top company executive yell, 'Sell my stock before the whole company goes under.' Kenneth became worried enough that he advised other employees to immediately join him in selling their shares. Did he do anything wrong?

Question 17 17. A former employee sued his company for patent infringement. He claimed that they were trying to establish a monopoly and that they cost him his life's savings. The jury ruled in his favor and decided the company needed to pay him $20 million. The court chose to use a provision of the Clayton Act called treble damages, meaning that the company had to pay _____.

Question 18 18. Which section of the Securities Act of 1933 covers the sale of non-exempt securities?

Question 19 19. How does the Antifraud Rule affect financial information relating to exempt securities?

Question 20 20. Technoprinters developed a new printer that everyone wants. The printer can only use the ink cartridges that they manufacture. As a result, people must buy complementary products from them. Why is this illegal?

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Question 21 21. Highway Motel and Motel Vagabond are the only two hotels on Route 1A. A snow storm is predicted for Saturday night. Knowing that the highway may be impassable, the two innkeepers decide to raise their prices from $39.00 a night to $149.00 a night. Why is this an example of price fixing?

Question 22 22. How do companies attract investors?

Question 23 23. Freddie just read an article in the financial section of a local paper that stated XYZ Company is in big trouble for faking lab results for a new medication. He decides to call his broker to request that his stock be sold immediately. Freddie is:

Question 24 24. Tony's Tomato Sauce Company charges a significantly higher price to certain pizzerias and less to others in the same market. Tony's is engaged in:

Question 25 25. Sampson Industries manufacture a car powered by cooking oil. You only need corn oil to run the car. However, when a customer purchases a car, they are forced to agree to purchase oil from Sampson and no other seller. This an example of a _____.

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Question 26 26.

True or false:

1. Insider trading is the act of using confidential or inside information about a publicly traded company to one's advantage to buy and sell stock, and it is legal.

2. A publicly traded company's prospectus is available for all to see.

3. The prospectus has to be according to the Securities and Exchange Commission (SEC).

Question 27 27. A treasury bond or a municipal bond does not have to register with the SEC because the government backs it. These types of securities are known as:

Question 28 28. Flip's Burgers only sells Yum-A-Roo brand sodas. This is considered:

Question 29 29. Conglom sells several hundred copiers to a major law firm. In the agreement to purchase the copiers at a specific price, they require that the law firm also purchase paper from Conglom exclusively. This is known as:

Question 30 30. All of the following are examples of exempt securities except _____.

Securities and Antitrust Law Chapter Exam Instructions

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

CLEP Introductory Business Law: Study Guide & Test Prep  /  Business Courses