Chris, a Coder for Drones Inc

question 48

Multiple Choice

Chris, a coder for Drones Inc., learns of undisclosed company plans to market a new, smart drone. Chris buys 10,000 shares of the firm's stock. If Chris is liable under the Securities Exchange Act of 1934, it will be because the information on which he based his purchase of the stock was

• A)a forward-looking forecast.
• B)not material.
• C)not yet public.
• D)not yet true.

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Definitions:

Uncertificated

Referring to securities or stocks that are not represented by a physical certificate, existing only as electronic records.

Physical

Physical pertains to anything related to the body or the material world, as opposed to mental or virtual aspects.

Cumulative Voting

A method of voting used in elections for directors of a corporation, allowing shareholders to multiply the number of votes they have by the number of positions available and to allocate their votes among candidates as they see fit.

Minority Shareholders

Individuals or entities that own less than 50% of a company's shares and therefore have limited control over company decisions.