CONSUMER PROTECTION, INVESTOR PROTECTION, CORPORATE GOVERNANCE

1. A consumer is told that he cannot receive a credit card because he receives public assistance benefits. Under which act might he bring suit against the lender?

a.Fair Debt Collection Practices Act

b. Truth in Lending Act

c.Fair Credit Reporting Act

d.Equal Credit Opportunity Act

2.Consumers are entitled to obtain a free credit report under which statute?

a.The Truth in Lending Act

b. The Fair Credit Reporting Act

c. The Fair and Accurate Credit Transactions Act

d. The Fair Debt Collection Practice Act

4. Able Company advertises its products as "made of 100% Brazilian ebony" when in fact the products are made from plastic.What administrative agency likely would bring an administrative action against Able for deceptive advertiing?

a.The FTC

b.The FCC

c.The IRS

d.The SSA

4.Able Coffee Company advertises its coffee by the claim that "this is the best tasting coffee available on the mass market."The advertisement is an example of:

a. Puffery

b. Bait and Switch

c.Half Truth

5.. Administrative agencies receive their power from whom, and by what means?

a.From Congress, through enabling legislation.

b.From the President, through executive order.

c.From the Constitution, through amendments.

d.From Congress, through resolution.

6 The Federal Drug Agency has records of the tests of a new drug.A consumer group wants those records.Under what statute is the consumer group entitled to seek those records?

a.The Sunshine Act

b.The Freedom of Information Act

c.The Regulatory Flexibility Act

d.The Small Business Regulatory Enforcement Fairness Act

7.An administrative agency's regulations may be overturned by:

a.Presidential veto

b.A resolution of the House of Representatives disapproving the regulation.

c.A judicial decision finding the regulation arbitrary and capricious, or finding that the regulation exceeded the powers granted to the agency.

d.the passage of timeall regulations come with time limits.

8.The Sarbanes-Oxley Act requires senior-level corporate officers to establish and maintain an effective system of internal controls. What are internal controls?

a.Disclosure measures and procedures to ensure accuracy of company share price movements

b.Disclosure measures and procedures to ensure accuracy of company operational performance reports

c.Disclosure measures and procedures to ensure accuracy and timeliness of product safety results

d.Disclosure measures and procedures to ensure accuracy and timeliness of company financial reports

9.What is the Sarbanes-Oxley Act certification requirement for systems of internal control by the CEO and CFO?

a.To maintain an internal control system and disclose any deficiencies in the system to the audit committee

b.To maintain an internal control system and disclose any deficiencies in the system to the independent auditors

c.To maintain an internal control system and disclose any deficiencies in the system to the Public Company Accounting Oversight Board (PCAOB)

d.To maintain an internal control system and disclose any deficiencies in the system to the board of directors

10.Which securities law or act governs when the Securities and Exchange Commission attempts to prohibit the use of manipulative practices in violation of its rules and regulations?

a.Private Securities Litigation Reform Act

b.Securities Exchange Act of 1933

c.Securities Exchange Act of 1934

d.Blue sky laws

11.Who certifies the accuracy of information in the financial statements filed with the SEC?

a.The CEO and CFO

b.The audit committee

c.The board of directors

d.The independent auditor

12.Ajax Corporation intends to make a public offering of shares of stock and issues a prospectus.Ajax owns a gold mine in a foreign country.Recently, the government of that country privately warned Ajax that it was demanding that Ajax turn over 50% interest in that mine to a government-owned company, or else Ajax would be forced out of the country altogether.Ajax did not mention that demand in its prospectus.This might be

a.a material omission in the prospectus that violates the Securities Act of 19;33.

b.a material omission in the prospectus that violates the Securities Exchange Act of 1934.

c.not required to be disclosed because it was a future event that had not yet occurred.

13.Ajax Corporation's CEO is paid a bonus each year based on the growth in the share price.Near the end of Ajax's fiscal year, the CEO held a press conference stating that "we expect to see production in our gold mine increase up to 150% next year."In fact, the expected increase was more like 15%.After the announcement, the share price increased a great deal.The CEO:

a.may be criminally prosecuted under the Securities Exchange Act of 1934 for making a material misrepresentation.

b.may be liable to private investors for that material misrepresentation, under the Securities Exchange Act of 1934.

c.may be liable may be liable to private investors for that material misrepresentation, under the Securities Act of 1933.

d.may be liable under the Sarbanes-Oxley Act.

14.Tom Smith, who works at Ajax, learned about the threat of the foreign government to take over the company's gold mine (see a few questions back), which was not yet public information.He called his sister and told her to sell all her Ajax stock immediately.This was:

a.stock manipulation

b.fraud

c.insider trading

d.being a good brother