Under the Securities Law, Liability for Misstatements

question 14

Multiple Choice

Under the securities law, liability for misstatements:

• A) can be imposed on securities offerors, but not corporate officials
• B) cannot be imposed for overly optimistic statements made by executives
• C) would not be imposed for misstatements in press releases due to First Amendment protection of media
• D) none of the other choices
• E) can only be imposed by the SEC, not by private party litigation

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Definitions:

Competitive Level

A state in a market where firms are able to enter and exit freely, and prices are determined by supply and demand.

Industry

A classification of businesses that perform similar types of work or produce similar goods and services.

Output

The total amount of goods or services produced by a company or economy.

Marginal Social Cost

Sum of the marginal cost of production and the marginal external cost.