To Avoid Sanctions Under Section 10(b)of the Securities Exchange Act

question 26

True/False

To avoid sanctions under Section 10(b)of the Securities Exchange Act of 1934 and SEC Rule 10b-5, scienter must exist.

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Definitions:

Law of Demand

An economic principle stating that as the price of a good or service decreases, the quantity demanded increases, and vice versa, holding other factors constant.

Effective Price Floor

A government-imposed limit below which prices cannot legally fall, set above the equilibrium price, leading to potential surplus or excess supply.

Industry Firms

Companies or businesses that operate within a specific sector of the economy, producing goods or services related to that sector.

Ceiling Price

A maximum legal price set by the government on certain goods or services to prevent prices from rising above a certain level.