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:

Variable Costs

Expenditures that directly correspond with production levels or the amount of sales.

Fixed Costs

Expenses that remain constant regardless of the level of production or business activity.

Suspension of Operations

The temporary halt of business activities or operations, which can be due to a variety of reasons, including economic downturns or emergencies.

Variable Cost

Costs that change in proportion to the level of goods or services produced, such as materials and labor.