LES 305 EXAM QUESTIONS WITH VERIFIED CORRECT ANSWERS

LES 305 EXAM QUESTIONS WITH
VERIFIED CORRECT ANSWERS
QUESTION >Digital Millennium Copyright Act (DMCA) - CORRECT ANSWER~1988
amendment to federal copyright laws that includes use of computer technology to copy
music and other copyrighted materials as infringement.

QUESTION>Lanham Act of 1946 - CORRECT ANSWER~Federal law that protects
trademarks and trade names.

QUESTION>Trade Dress - CORRECT ANSWER~The overall look, feel, color, and
decorative design of a business.

QUESTION>Internet Corporation for Assigned Names and Numbers (ICANN) -
CORRECT ANSWER~Organization that registers domain names for purposes of
protection of those names and intellectual property.

QUESTION>Cybersquatting - CORRECT ANSWER~Process of registering sites and
domain names that are deceptively or confusingly similar to existing names, trade
names, and trademarks.

QUESTION>Palming Off - CORRECT ANSWER~Unfair trade practice of passing off
mock goods as the goods of another.

QUESTION>Computer Software Copyright Act of 1980 - CORRECT
ANSWER~Provides copyright protection for software.

QUESTION>Trade Libel - CORRECT ANSWER~Written defamation of a business.

QUESTION>Disparagement - CORRECT ANSWER~Defamation of a business, its
trademark or its products.

QUESTION>Trademark - CORRECT ANSWER~A distinctive symbol on goods that
identifies the manufacturer.

QUESTION>Fair Use - CORRECT ANSWER~One of the exceptions to copyright
protection; permits limited use of copyright material.

QUESTION>Madrid Agreement - CORRECT ANSWER~In international law, 1891
multilateral treaty for protection of trademarks that permits registration and protection
through a centralized registrar in Geneva.

QUESTION>Knock-Off Goods - CORRECT ANSWER~Goods manufactured by
someone other than the trademark or trade name holder without authorization and not
according to the standards of the owner.

, QUESTION>Patent - CORRECT ANSWER~Exclusive ownership rights given to by the
federal government to inventors of unique, nonobvious processes, products, or
services.

QUESTION>Gray Market - CORRECT ANSWER~Market in which trade name goods
are sold through unauthorized dealers or without authorization from the owner of the
trade name.

QUESTION>Opposition Proceedings - CORRECT ANSWER~In non-U.S countries, the
patent process that allows third parties to appear and object to a patent application.

QUESTION>Federal Trademark Dilution Act - CORRECT ANSWER~Federal law that
permits trademark owners to file lawsuits to prevent others from impairing the mark's
distinctiveness.

QUESTION>Misappropriation - CORRECT ANSWER~Intentional tort of using others'
trade secrets.

QUESTION>Trade Name - CORRECT ANSWER~Name of a firm or product; entitled to
federal protection for exclusive use.

QUESTION>Copyright - CORRECT ANSWER~Exclusive ownership rights given to by
the federal government to creators of books, music, and other creative works.

QUESTION>Securities Exchange Act of 1934 - CORRECT ANSWER~The federal law
governing secondary sales of securities, the markets, and the firms dealing with
securities.

QUESTION>10-K Form - CORRECT ANSWER~Annual report filed with the SEC;
required of all 1934 Act firms.

QUESTION>Merger - CORRECT ANSWER~Process of combining firms so that one
firm becomes a part of the other and only one firm's name is retained.

QUESTION>Insider Trading and Securities Fraud Enforcement Act of 1988 -
CORRECT ANSWER~Act increasing the Securities Exchange Act of 1934 penalties for
insider trading.

QUESTION>Blue-Sky Law - CORRECT ANSWER~State law regulating sale of
securities.

QUESTION>Comment/Deficiency Letter - CORRECT ANSWER~SEC response to
registration filing; requires additional information or clarification on proposed offering.

, QUESTION>Williams Act - CORRECT ANSWER~Federal law governing the tender
offer process.

QUESTION>Insider - CORRECT ANSWER~A corporate officer or director or other
executive with access to corporate information that is not available to the public.

QUESTION>Tippee - CORRECT ANSWER~Party who receives inside information
about a corporation or its securities and uses the information to trade securities.

QUESTION>Consolidation - CORRECT ANSWER~A form of merger in which two firms
unite and become known by a new name.

QUESTION>10-Q Form - CORRECT ANSWER~Quarterly report filed with the SEC;
required of all 1934 Act firms.

QUESTION>Howey Test - CORRECT ANSWER~Created by theU.S. Supreme Court;
it defines a security as an investment in a common enterprise that earns profits from the
efforts of others.

QUESTION>Section 16 - CORRECT ANSWER~Section of the Securities Exchange
Act of 1934 that regulates sales and purchases of shares by directors, officers, and 10
percent of shareholders.

QUESTION>Tombstone Ad - CORRECT ANSWER~Ad run in newspapers announcing
an upcoming securities offering; permissible after the registration statement is filed but
not yet effective; must indicate it is not an offer for sale.

QUESTION>Tender Offer - CORRECT ANSWER~Offer to more than 10 percent of the
shareholders of a firm for the purchase of their shares; generally part of a takeover
effort.

QUESTION>Short-Swing Profits - CORRECT ANSWER~Profits made by corporate
insiders during a period of less than six months between purchase and sale.

QUESTION>Securities - CORRECT ANSWER~Investment of money in a common
enterprise with profits earned largely from the efforts of others.

QUESTION>Merit Review - CORRECT ANSWER~Process at the state level of
reviewing securities registrations to determine whether they are good investments.

QUESTION>Exemption - CORRECT ANSWER~Securities and transactions that do not
have to be registered with the SEC under the Securities Act of 1933.

QUESTION>Asset Acquisition - CORRECT ANSWER~Form of takeover in which
another firm buys all the assets of a firm and gains control through control of the firm's

, property. If structured property, the acquirer avoid liability for the debts of the acquired
business.

QUESTION>Hostile Takeover - CORRECT ANSWER~A takeover not favored by the
target's management.

QUESTION>Foreign Corrupt Practices Act (FCPA) - CORRECT ANSWER~Federal
law prohibiting bribes in foreign countries and requiring the maintenance of internal
controls on accounting for firms registered under the Securities Exchange Act of 1934.

QUESTION>Prospectus - CORRECT ANSWER~A document describing the nature of
securities and the company offering them.

QUESTION>Due Diligence - CORRECT ANSWER~Under the Securities Act of 1933, a
defense for filing a false registration statement that requires proof that the individuals
involved did all they could to uncover the truth and could not have discovered the false
statements despite a thorough review of all relevant information.

QUESTION>Proxy Solicitations - CORRECT ANSWER~The process of seeking voting
rights from shareholders.

QUESTION>Red-Herring Prospectus - CORRECT ANSWER~A prospectus issued
before the effective date of a securities registration statement; permissible to release
these before the registration statement is effective so long as a disclaimer that it is not
an offer to sell securities is noted in red on the prospectus.

QUESTION>Takeover - CORRECT ANSWER~A takeover of one firm by another firm
when the target firm solicits or agrees to the takeover.

QUESTION>Securities Act of 1933 - CORRECT ANSWER~The federal law governing
the initial issuance and sale of securities to the public.

QUESTION>"Fair-Disclosure Rule" (Regulation FD) - CORRECT ANSWER~Federal
securities regulation that requires publicly traded companies to distribute information to
the market as a whole and not to selected investment firms, analysts, or investors; a
means of distributing to the market in a fair and open fashion the financial reports and
pending and evolving issues of publicly traded company.

QUESTION>Rule 10b-5 - CORRECT ANSWER~SEC rule prohibiting fraud in relation
to the sale of securities.

QUESTION>Securities and Exchange Commission (SEC) - CORRECT
ANSWER~Federal agency responsible for enforcement of federal securities law.

QUESTION>Material Misstatement - CORRECT ANSWER~A statement of fact that
would influence an individual's decision to buy or sell.