Question 1

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.

True or False?

Question 2

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.

True or False?

Question 3

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.

True or False?

Question 4

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."

True or False?

Question 5

The US Federal Reserve has placed limits on how much of a stock can be purchased 'on the margin.'This is meant to limit the tendency for credit to create market bubbles.

True or False?

Please answer question and If the answer is false, explain your reason