In a Suit for Fraud Against the Issuer of a Security

question 25

Multiple Choice

In a suit for fraud against the issuer of a security, which element would not have to be shown?

• A) a security was involved
• B) there was a misleading statement or material omission
• C) bad information was contained in an SEC filing
• D) all elements must be shown
• E) none of these elements are necessary, but make for a stronger case

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Definitions:

Utility

A measure of satisfaction, pleasure, or usefulness obtained from consuming goods and services.

Indifference Curves

Graphical representations showing combinations of goods or services that provide the same level of satisfaction to a consumer.

Ordinary Goods

In a consumer’s utility function, those for which additional units of one good are required to compensate for fewer units of another, and vice versa; and for which the consumer experiences a diminishing marginal rate of substitution when substituting one good in place of another.

Marginal Rate

The rate at which one variable changes over the change in another variable, often used in the context of taxes or marginal rate of substitution in economics.