What Is the Significance of the Howey Test Under Federal

question 60

Multiple Choice

What is the significance of the Howey test under federal securities law?

• A) It determines a security's type.
• B) It determines whether stocks and bonds are securities.
• C) It determines whether investment contracts are securities.
• D) B and C only
• E) A,B,and C

---

Definitions:

Trade Credit Discounts

Reductions in the price of goods or services offered by suppliers to their customers as an incentive for early payment.

Performing Poorly

A term used to describe assets, investments, or businesses that are not achieving expected levels of profit or performance.

Cash Budgets

Financial plans that estimate future cash receipts and expenditures over a specific period.

Planning Purposes

The process of preparing for future operations or activities by setting objectives, developing strategies, and outlining tasks and schedules to accomplish the goals.