When a Principal Is Classified as a Disclosed Principal, Which

question 62

Multiple Choice

When a principal is classified as a disclosed principal, which of the following is true?

• A) The third party is totally unaware that the agent is action for a principal.
• B) A third party can sue both the principal and the agent for misrepresentation.
• C) A third party is aware that an agent is making an agreement on behalf of a principal, and the third party also knows the identity of the principal.
• D) A third party can choose to contract only with the agent instead of the principal.
• E) A third party must consult with the principal before agreeing to be bound in any contract.

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Definitions:

SEC

The U.S. Securities and Exchange Commission, a federal agency responsible for regulating the securities industry, stock and options exchanges, and other electronic securities markets in the United States.

1934 Act

Refers to the Securities Exchange Act of 1934, which governs the trading of securities in the U.S., aiming to protect investors against malpractice.

Willful Violations

Willful violations refer to deliberate or intentional breaches of a legal duty or regulation, often resulting in stricter penalties or damages.

Fine

A monetary penalty imposed as punishment for an offense or breach of law.