The Purpose of the SEC's Circuit Breakers Rule Is to

question 275

Multiple Choice

The purpose of the SEC's circuit breakers rule is to

• A) prevent market disruption caused by a communication malfunction.
• B) halt trading for a short time following a dramatic drop in stock prices.
• C) allow floor traders to specialize in trading the securities of specific industries.
• D) prevent individuals from profiting from information not available to the general public.

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Definitions:

Leveraged Lease

A financing agreement where a lessor borrows funds to purchase an asset, which is then leased to a lessee, with the lease payments ensuring repayment of the loan.

Single Investor Lease

A lease agreement in which a single investor owns the asset and leases it directly to a company, who then has the option to buy the asset at the end of the lease term.

Conditional Sales Agreement Lease

A lease agreement where the lessee has the option to purchase the leased asset at the end of the lease term under agreed-upon conditions.

Financial Leases

Long-term leases that effectively transfer the risks and rewards of ownership from the lessor to the lessee, almost like a loan arrangement.