If a Company Has Made an Offering Under the Rule

question 2

Multiple Choice

If a company has made an offering under the Rule 504 exemption and had misrepresentations in the materials it gave to investors,which of the following is true?​

• A)​Because the company used an exemption, there is no liability for any misinformation communicated to investors.
• B)​Shareholders could recover under Section 14 of the 1934 Securities Exchange Act.
• C)Shareholders could recover under Section 12.
• D)Shareholders could recover under Dodd-Frank provisions that apply to exempt offerings.

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Definitions:

Willingness

The readiness of a person to engage in a particular action, especially in terms of purchasing goods or services.

Marginal Utility

The additional utility received from consuming one more unit of a good or service.

Total Utility

The complete happiness or advantage gained from using a specific amount of products or services.

Product Consumed

Refers to goods or services that have been used by consumers, fulfilling needs or wants.