Which of the Following Is True Regarding Any Affirmative Defenses

question 59

Multiple Choice

Which of the following is true regarding any affirmative defenses available under Section 20(a) of the Securities Exchange Act?

• A) There are no affirmative defenses available.
• B) Comparative negligence is an affirmative defense.
• C) Contributory negligence is an affirmative defense.
• D) An affirmative defense exists when the controlling person acted in good faith and did not directly or indirectly induce the act or acts constituting the underlying violation or cause of action.
• E) Comparative negligence and contributory negligence are affirmative defenses, and also an affirmative defense exists when the controlling person acted in good faith and did not directly or indirectly induce the act or acts constituting the underlying violation or cause of action.

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Definitions:

Variable Costs

Prices that adjust based on the quantity of products made or sold.

Pretax Income

Income earned by an entity before any taxes have been deducted.

Operating Leverage

The degree to which a firm or project can increase operating income by increasing revenue, reflecting the fixed versus variable cost structure.

Clockworks Co.

A hypothetical or generic name that could be used to refer to a company specializing in mechanical devices, especially those involving gears and timekeeping mechanisms.