Multiple-Choice Questions
1. Under Regulation D, an issuer:
A. May not sell to a thousand accredited investors
B. May not sell to 27 unaccredited investors
C. Must make disclosure to accredited investors
D. Must make disclosure to unaccredited investors
E. May advertise the stock publicly

2. Which of the following statements is not true about a public offering?
A. The issuer files a registration statement with the SEC.
B. The issuer files a prospectus with the SEC.
C. Company officers may make public statements about the offering before the stock is sold.
D. Company officers may make public statements about the offering after the stock is sold.
E. The issuer may solicit offers for the stock before the effective date.

3. To have an illegal monopoly, a company must:
I. Control the market
II. Maintain its control improperly
III. Have a market share greater than 50 percent
A. I, II, and III
B. I and II
C. II and III
D. I and III
E. Neither I, II, nor III

4. Lloyd sold car floor mats to Mercedes dealerships. Then Mercedes began to include floor mats as standard equipment. Mercedes has a 10 percent share of the luxury car market.
A. Mercedes has created an illegal tying arrangement because floor mats and cars are separate products.
B. Mercedes has not created an illegal tying arrangement because floor mats and cars are not separate products.
C. Mercedes has created an illegal tying arrangement because its market share is 10 percent.
D. Mercedes has not created an illegal tying arrangement because it is not tying the two products together.
E. Mercedes has created an illegal tying arrangement because it controls the market in floor mats.

5. Mike is director of sales for his company. He negotiates prices with Paige and Lauren, who work for two of his biggest customers. Paige tells him that she can buy the same product cheaper elsewhere. He cuts the price for her, but not for his other customers. At the same time, he develops a crush on Lauren, so offers to sell her the product at a lower price. In subsequent months, these two customers come to dominate the market. Which statement is correct:
A. Mike can charge whatever price he wants to any customer.
B. Mike must charge all his customers the same price.
C. The price cut to Paige, but not Lauren, is legal.
D. The price cut to Lauren, but not Paige, is legal.
E. Mike is not required to charge all his customers the same price, but neither of these price cuts is legal.