5 Written questions
4 Matching questions
- 20. Smork, a USC freshman majoring in chemistry, invents a new body cream that, if rubbed on the skin, sucks out the body fat from that location; it is non-surgery liposuction. With this cream a user can "spot" the area that needs a little thinning, rub some cream on that area, and the fat disappears! Smork names the cream "LIFO "("last in, first off") and names his new corporation that will produce the cream LIFO, Inc. The potential for LIFO is tremendous as the phone rings off the hook with calls from Oprah, Monica, Allie, Rosey, et al. LIFO, Inc. is planning on going public and is preparing the materials to file its registration statement with SEC. What can LIFO Inc. not do during the prefiling period?
A. Make offers to sell its securities
B. Sell its securities
C. Condition the market
D. B and C
E. A, B and C
- 22. In the United States, Starbucks Coffee Shops are owned by the Starbucks Corporation. However, Starbucks Corporation decides to open Starbucks Coffee Shops in China. To do so, Starbucks Corporation grants the Sino Corporation, a Chinese corporation, a franchise to select and grant local franchises to owners that Sino Corporation selects throughout China. What type of franchise arrangement exists between Starbucks Corporation and Sino Corporation?
A. Processing plant franchise
B. Distributorship franchise
C. Distributorship franchise
D. Area franchise
E. Local franchise
- 39. Which of the following is (are) true concerning a Regulation A offering?
A. A Regulation A offering over $100,000 must have an offering statement filed with the SEC
B. A Regulation A offering is an exempt transaction
C. An issuer can issue up to $5 million of securities within a 12-month period
D. A and C
E. B and C
- 34. On May 1, 2009, after getting angry with his father Peter, Stewie moves from California to Texas and purchases a house in Texas for $3,000,000. Stewie is rich because of his role in the TV series "Family Guy." Stewie pays cash for the house. On April 28, 2010, Stewie declares Chapter 7 bankruptcy and claims a $3,000,000 homestead exemption on his house that is normally allowed by Texas law. Under the new 2005 Bankruptcy Act, which of the following is true?
A. Stewie would be able to exempt $0 for his house
B. Stewie would be able to exempt $1, 500,000 for his house
C. Stewie would be able to exempt $125,000 for his house
D. Stewie would be able to exempt $3,000,000 for his house
E. Stewie would be able to exempt $2,000,000 for his house
- a D. A and C
- b C. Stewie would be able to exempt $125,000 for his house
- c D. Area franchise
- d E. A, B and C
5 Multiple choice questions
- A. You are not liable for violating Section 10(b)
- D. A and C
- A. Hart-Scott Rodino Antitrust Act
- E. A and C
- C. Misappropriation theory
5 True/False questions
12. The Frog Inc. saga continues. Frog Inc. wants to retain its current French-socialist management during the bankruptcy proceedings. Although current management has missed the dietary changes of Americans to modern types of cuisine, management has not engaged in fraud nor wasted corporate assets. All managers agrees to obtain M.B.A. degrees from USC and become capitalist imperial dogs. They also agree to go to Charm School for one year. Management is therefore allowed to remain in place during the bankruptcy under which of the following doctrines?
A. Reaffirmation contract
B. Executory contract
C. Lien release
D. Debtor in possession
E. Cram down → A. Chapter 7
35. Under federal securities law, the Securities and Exchange Commission (SEC) can obtain a civil penalty up to _________ times the illegal profits gained by insider trading.
E. ten → C. three
24. The "Howey test" is used to determine whether a sale of something is an "investment contract" and therefore a security that is subject to federal securities laws. Which of the following is not an element of the Howey test?
A. Expect to make profits off the significant effort of others
B. Investment of money
C. Common enterprise
D. Oil, gas, and mineral interest
E. None of the above → C. Chain-style
4. Which section of the Securities Act of 1933 imposes criminal liability on defendants?
A. Section 11
B. Section 12
C. Section 10(b)
D. Section 32
E. Section 24 → D. A and C
13. Wal-Mart, Target and Costco, all discount retailers, decide to sell Shaquille O'Neal's, an NBA superstar, new instructional video "I can't shoot free throws, but you can!" They all agree that they will all sell the popular video for $49.99 (most videos of this type are priced at $19.95) and at no other price. This is an example of which of the following?
A. Division of markets
B. Tying Arrangement
C. Price fixing
D. Resale price maintenance
E. Group boycott → C. Price fixing