The Courts Apply the Howey Test in Determining Whether an Arrangement

question 62

Short Answer

The courts apply the Howey test in determining whether an arrangement is a(n)________ and therefore a security.

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Definitions:

Rate Of Inflation

The magnitude of acceleration in average prices for goods and services, which causes a downfall in the ability to procure.

Treasury Bills

Short-term government securities with maturity periods of one year or less, sold to finance the national debt.

Capital Gains

The profit earned from selling an asset for more than its original purchase price.

Total Returns

The overall return on an investment, including both capital gains and income, over a specific period.