A Price Ceiling

question 204

Multiple Choice

A price ceiling:

• A) is a maximum price allowed by law.
• B) is a minimum price allowed by law.
• C) has an effect only when it is set above the market price.
• D) has little effect on market activity.

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Definitions:

Section 11

A provision of the U.S. Securities Act of 1933 that imposes liability on issuers and others for material misstatements or omissions in registration statements.

Securities Act of 1933

A U.S. law enacted to ensure greater transparency in financial statements so investors can make informed decisions.

Auditor Liability

The legal responsibility of auditors for their professional actions, particularly in relation to the accuracy of financial statements they audit.

Defective Registration Statement

A legal document filed with the SEC that contains inaccurate, misleading, or incomplete information about securities being offered for public sale.