What Is the Effect of a Negligent Misrepresentation

question 41

Multiple Choice

What is the effect of a negligent misrepresentation?

• A)It is treated as an ethics violation,and is punishable per se as a white-collar crime.
• B)It is treated the same as an innocent misrepresentation.
• C)It is treated the same as a fraudulent misrepresentation.
• D)It is treated the same as a non-material misrepresentation.
• E)It is treated the same as an implied misrepresentation.

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Definitions:

Premium on Common Stock

The amount by which the sale price of a share of common stock exceeds its par value.

Organization Expense

Costs incurred in the creation and organization of a corporation, such as legal fees, that may be amortized over time.

Stock Warrant

A financial instrument that gives the holder the right, but not the obligation, to buy a company's stock at a specific price before a certain date.

Par Preferred Stock

Preferred shares of stock issued at a specified nominal value, known as the par value.