Under the Securities Act of 1933, Subject to Some Exceptions

question 53

Multiple Choice

Under the Securities Act of 1933, subject to some exceptions and limitations, it is unlawful to use the mails or instruments of interstate commerce to sell or offer to sell a security to the public unless

• A) A surety bond sufficient to cover potential liability to investors is obtained and filed with the Securities and Exchange Commission
• B) The offer is made through underwriters qualified to offer the securities on a nationwide basis
• C) A registration statement has been properly filed with the Securities and Exchange Commission, has been found to be acceptable, and is in effect
• D) The Securities and Exchange Commission approves of the financial merit of the offering

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Definitions:

Book Value

The net value of a company's assets as recorded on the balance sheet, deducting liabilities, indicating the shareholder equity.

Residual Value

The projected worth of an asset upon reaching the conclusion of its service period.

Straight-line Method

A depreciation method that allocates an equal amount of depreciation each year over the useful life of an asset.

MACRS

Modified Accelerated Cost Recovery System, a method of depreciation in the U.S. that allows businesses to recover investments in certain property through annual deductions.