Which of the Following Is True of the Securities Act

question 18

Multiple Choice

Which of the following is true of the Securities Act of 1933?

• A) It prohibited misrepresentation in the sale of newly issued stocks and bonds.
• B) It made firms issuing new securities independent of the Securities and Exchange Commission.
• C) It issued a list of protocols for brokers and brokerage firms.
• D) It established the Financial Stability Oversight Council.

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Definitions:

SEC Rule 12b-1

A regulation by the U.S. Securities and Exchange Commission that allows mutual funds to charge their shareholders for advertising and sales promotion expenses.

Marketing Expenses

Costs associated with promoting a company, product, or service, including advertising, product samples, and event sponsorships.

Fund Assets

The total value of all the securities and cash held by an investment fund.

Exchange-traded Fund

A type of investment fund and exchange-traded product, i.e., they are traded on stock exchanges. ETFs hold assets such as stocks, commodities, or bonds and generally operate with an arbitrage mechanism designed to keep it trading close to its net asset value.