The Ability of an Investing Company to Affect the Operating

question 47

Multiple Choice

The ability of an investing company to affect the operating and financial activities of another company, even though the investor holds less than 50% of the stock, is known as

• A) significant influence.
• B) control.
• C) a combination.
• D) influence and control.

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Definitions:

Securities Exchange Act

Legislation governing the secondary trading of securities (stocks, bonds, and debentures) in the United States, aiming to provide transparency and fairness.

Securities Act

A federal law enacted to regulate the offer and sale of securities to protect investors from fraud.

Securities and Exchange Commission

A U.S. federal agency responsible for enforcing federal securities laws and regulating the securities industry, stock and options exchanges.

Securities and Exchange Act

A U.S. law enacted in 1934 to regulate securities transactions on the secondary market, thereby protecting investors and maintaining fair and efficient functioning of the securities markets.