Please help with the T/F answer thank you!!

Question 5

Stockbrokers, as opposed to dealers, can use their brokerage firm's inventory of stocks to facilitate trades.

Question 6

A new company is selling its stock via a private placement, but only to fully accredited investors.It must still register under the 1933 Securities Act.

Question 7

"Joint and several" liability of company spokesmen and underwriters in an IPO is less favorable to investors than several liability alone.

Question 8

With 50 other people, I am a co-owner of an apartment in Honolulu, Hawaii. In return for our investment, each of the 51 owners gets to spend one week per year in the apartment.A company manages the apartment building.My share in this apartment is not an Investment Contract in the sense of Howey.

Question 9

The Supreme court decided that the Howey company was a financial security, even though some owners did directly manage their trees.This means that, in contradiction to the way the Howey rules are usually stated, they were not managed "solely through the efforts of others."

Question 10

Managers of a company in an IPO cannot actually sell its stock before registration becomes effective.But they can still "market" it, soliciting investment for when it is registered.

Question 11

Most public companies obey SEC demands without challenging them in court.Themain reason is that they know the courts almost always rule in favor of the SEC.

Question 12

The materiality standard of "a substantial likelihood that a reasonable shareholder would consider it important" inTSC Industries v. Northwayis meant to protect investors from the dangers of a company providing either too little or too much information.

Question 13

According to the Supreme Court decision inBasic v. Levinson, a CEO cannot falsely deny merger negotiations are taking place, even if the lie makes the merger more likely, and the merger would raise the company's value.

Question 14

If your Broker-Dealer goes bankrupt and a trade you ordered cannot be executed, insurance under the Securities Investor Protection Act entitles you to compensation for any gains you could have made if you had executed that trade on time.

Question 15

On an IPO Registration statement, a 'red herring' means a notice in red letters telling investors that the Registration has not been approved by the SEC.

Question 16

Publicly traded companies are subject to both theprincipal-agentand thecollective actionproblem, but other forms of business-ownership are not subject to these problems.

Question 17

The principal-agent problem of joint stock companies means that it is not easy for individual shareholders to monitor the activity of company management.

Question 18

2 companies meet to discuss a merger, but do not announce it publicly.They have a duty to disclose this meeting to stock-holders, even if none of them asks about it.

Question 19

"Penny Stocks" are easily manipulated by traders because (check allcorrect answers):

Question 20

Investment Advisers cannot offer advice for a security in which their firm has a holding

Question 21

The collective action problem in stock ownership means that, even without regulation,an individualshareholder can rely on other shareholders to keep the company's managers honest.

Question 22

If a company spokesperson is addressing the public and makes claims that he/sheknowsare false, then he/she must be in violation of US Securities law.

Question 23

Financial Advisers have afiduciaryduty to their clients.

Question 24

If the underwriters of an IPO endorse a false statement by the issuing company but does not know that it is false, then they cannot be held liable.

Question 25

The Dodd-Frank Act (2010) required that Broker-Dealers and Investments Advisors must be subject to the same standard of financial responsibility.