Fraud Occurs When Any Material Fact Is Omitted from a Prospectus

question 56

True/False

Fraud occurs when any material fact is omitted from a prospectus causing a statement to be misleading.

---

Definitions:

Beta

A measure of a stock's volatility in relation to the overall market; a beta higher than 1 indicates the stock is more volatile than the market.

Dividend Growth Rate

The annualized percentage rate of growth of a company's dividend payments to shareholders.

T-Bill Rate

The yield or interest rate paid to investors of U.S. Treasury bills, a short-term government security.

SML

The Security Market Line, a representation in the Capital Asset Pricing Model (CAPM) that shows the expected return of a security or portfolio as a function of its systematic risk.