Which of the Following Is True Regarding Remedies Available Under

question 57

Multiple Choice

Which of the following is true regarding remedies available under Rule 10b-5?

• A) The measure of damages is typically out-of-pocket loss, or an investor may elect to rescind the transaction; and the court may award prejudgment interest; but punitive damages are unavailable.
• B) The measure of damages is typically out-of-pocket loss with no right on the part of an investor to elect to rescind the transaction, and the court may award prejudgment interest; but punitive damages are unavailable.
• C) The measure of damages is typically out-of-pocket loss, or an investor may elect to rescind the transaction; the court may award prejudgment interest; and punitive damages are available in appropriate cases.
• D) The measure of damages is typically out-of-pocket loss with no right on the part of an investor to elect to rescind the transaction, the court may award prejudgment interest, and punitive damages are available in appropriate cases.

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Definitions:

Stock Option Plan

A compensation strategy that allows employees to purchase company stock at a predetermined price.

Liability Account

An account used in accounting to keep track of obligations or debts that a company owes to others, representing claims against the company's assets by external parties.

Stock Option Plans

Programs established by companies to give employees the right to purchase a specific number of the company's shares at a fixed price for a certain period of time.

Stock Appreciation Rights

A type of incentive or compensation mechanism provided to employees that gives the right to receive a bonus equivalent to the increase in the company’s stock price over a set period.