lgs 200 final - ruth ann hall Exam
Questions With Correct Answers
business judgment rule - CORRECT ANSWER✔✔-as long as decisions are
made in good faith/honest belief that the action was taken in best
interest of the company, company CAN NOT be held liable for losses to
shareholders
entrepreneurs and importance of choosing right org - CORRECT
ANSWER✔✔-1. easiest for one person to own business, but also riskiest
because sole proprietor holds all liabilities
2. incorporating allows you to protect personal assets (same with LLC's)
securities act of 1933 - CORRECT ANSWER✔✔-1. regulates issuance of
securities
2. applies to initial use (including IPO's), sales of new securities
established by companies, and online sales
SEC - CORRECT ANSWER✔✔-securities exchange commission
1. formed when sec act of 1933 was passed
2. fed admin agency that can
, a. make rules and regs to interpret and implement fed sec laws
b. investigate securities violations and brings action
c. regs acts of brokers and advisors
d. regulates IPO's and "going public"
sarbanes-oxley act - CORRECT ANSWER✔✔-erects a wall between
investment bankers and securities analysts (fear that analysts who
provide investment advice to investors would be bias and give false high
marks to certain banks)
-avoids conflict and protects analysts
-any potential conflicts must be disclosed
short swing profits / trading - CORRECT ANSWER✔✔-insider buys own
stock, holds less than 6 months, sells for profit (use their own privy info
to know when to buy and sell)
insider trading - CORRECT ANSWER✔✔-prohibits use of material
nonpublic info to make a profit by trading securities of the company
insider trading sec 10b - CORRECT ANSWER✔✔-prohibits use of
manipulative and deceptive devices in the purchase or sale of securities
in contravention of the rules and regs by SEC
Questions With Correct Answers
business judgment rule - CORRECT ANSWER✔✔-as long as decisions are
made in good faith/honest belief that the action was taken in best
interest of the company, company CAN NOT be held liable for losses to
shareholders
entrepreneurs and importance of choosing right org - CORRECT
ANSWER✔✔-1. easiest for one person to own business, but also riskiest
because sole proprietor holds all liabilities
2. incorporating allows you to protect personal assets (same with LLC's)
securities act of 1933 - CORRECT ANSWER✔✔-1. regulates issuance of
securities
2. applies to initial use (including IPO's), sales of new securities
established by companies, and online sales
SEC - CORRECT ANSWER✔✔-securities exchange commission
1. formed when sec act of 1933 was passed
2. fed admin agency that can
, a. make rules and regs to interpret and implement fed sec laws
b. investigate securities violations and brings action
c. regs acts of brokers and advisors
d. regulates IPO's and "going public"
sarbanes-oxley act - CORRECT ANSWER✔✔-erects a wall between
investment bankers and securities analysts (fear that analysts who
provide investment advice to investors would be bias and give false high
marks to certain banks)
-avoids conflict and protects analysts
-any potential conflicts must be disclosed
short swing profits / trading - CORRECT ANSWER✔✔-insider buys own
stock, holds less than 6 months, sells for profit (use their own privy info
to know when to buy and sell)
insider trading - CORRECT ANSWER✔✔-prohibits use of material
nonpublic info to make a profit by trading securities of the company
insider trading sec 10b - CORRECT ANSWER✔✔-prohibits use of
manipulative and deceptive devices in the purchase or sale of securities
in contravention of the rules and regs by SEC
