In the Event That the SEC Staff Believes That a Prospectus

question 148

Multiple Choice

In the event that the SEC staff believes that a prospectus that has been submitted for review does not adequately explain the high-risk factors of an offering, it can:

• A) do nothing so long as the required elements have been provided
• B) issue a deficiency letter delaying the offering until more detail is provided
• C) obtain a Commission order barring the sale of the security
• D) obtain a court order barring the sale of the security
• E) require shelf registration proceedings to begin

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Definitions:

Scientific Method

A systematic and empirical approach to research, involving the collection of data, formulation and testing of hypotheses, and the development of theories.

Unbiased Development

The equitable and impartial progress in economic, social, and environmental aspects without favoritism.

Theories

Systematically organized knowledge applicable in a relatively wide variety of circumstances, especially a system of assumptions, accepted principles, and rules of procedure devised to analyze, predict, or otherwise explain the nature or behavior of a specific set of phenomena.

Opportunity Cost

The cost of forgoing the next best alternative when making a decision or choosing to use resources in one way rather than another.