1 28. Which of the following securities is exempt from registration under the Securities Act of 1933? a. Shares of nonvoting common stock, provided their par value is less than $1.00 b. A class of stock given in exchange for another class by the issuer to its existing stockholders without the issuer paying a commission c. Limited partnership interests sold for the pur- pose of acquiring funds to invest in bonds issued by the United States d. Corporate debentures that were previously subject to an effective registration statement, pro- vided they are convertible into shares of common stock (5/93, Law, #34, 4002) 79. When a common stock offering requires reg- istration under the Securities Act of 1933, a. The registration statement is automatically effec- tive when filed with the SEC b. The issuer would act unlawfully if it were to sell the common stock without providing the investor with a prospectus C. The SEC will determine the investment value of the common stock before approving the offering d. The issuer may make sales 10 days after filing the registration statement (11/91, Law, #36, 2364) 30 Under the Securities Act of 1933, which of the following statements most accurately reflects how securities registration affects an investor? a. The investor is provided with information on the stockholders of the offering corporation. b. The investor is provided with information on the principal purposes for which the offering's pro- ceeds will be used. C. The investor is guaranteed by the SEC that the facts contained in the registration statement are accurate. d. The investor is assured by the SEC against loss resulting from purchasing the security. (11/94, Law, #41, 5218) 30 Exemption from registration under the Securi- ties Act of 1933 would be available for a. Promissory notes maturing in 12 months b. Securities of a bank C. Limited partnership interests d. Corporate bonds (11/91, Law, #35, 2363) 32. Frey, Inc. intends to make a $2,000,000 com- mon stock offering under Rule 505 of Regulation D of the Securities Act of 1933. Frey a. May sell the stock to an unlimited number of investors b. May make the offering through a general advertising c. Must notify the SEC within 15 days after the first sale of the offering d. Must provide all inspectors with a prospectus (11/93, Law, #45, 4342) 33... A $10,000,000 offering of corporate stock intended to be made pursuant to the provisions of Rule 506 of Regulation D of the Securities Act of 1933 would not be exempt under Rule 506 if a. The offering was made through a general solici- tation or advertising. b. Some of the investors are nonaccredited. C. There are more than 35 accredited investors. d. The SEC was notified 14 days after the first sale of the securities. (11/90, Law, #45, 0749) 34 Which of the following statements concerning the prospectus required by the Securities Act of 1933 is correct? a. The prospectus is a part of the registration statement. b. The prospectus should enable the SEC to pass on the merits of the securities. c. The prospectus must be filed after an offer to sell. d. The prospectus is prohibited from being distrib- uted to the public until the SEC approves the accuracy of the facts embodied therein. (5/94, Law, #31, 4786) 35 A preliminary prospectus, permitted under SEC Regulations, is known as the a. Unaudited prospectus b. Qualified prospectus c. "Blue-sky" prospectus d. "Red-herring" prospectus (5/94, Law, #32, 4787) 3. If Securities are exempt from the registration provisions of the Securities Act of 1933, any fraud committed in the course of selling such securities can be challenged by SEC Person defrauded Yes Yes b Yes No No Yes d. No No a. C. no