Chapter 10 Practice Questions
1. An exempt offering:
A. Is exempt from the anti-fraud provisions of the Securities Act
B. Is exempt from state law
C. Does not require filing a registration statement with the SEC
D. Does not require any SEC filings
2. You are assisting Vermont’s Best Maple Syrup with an intrastate offering. An investor indicates in-state residency when you first meet with her. Several months later, you meet to sign the subscription agreement. You notice that the investor writes a New Hampshire address while filling out the agreement. You mention this to the investor, who states that she just moved. Which of the following is true?
A. Because she was a Vermont resident at the time of the initial offer, you may complete the sale.
B. Because she is a New Hampshire resident at this time, you may not complete the sale.
C. As long as the number of out-of-state purchasers does not exceed 35, you may complete the sale.
D. You committed a violation by not asking at the first meeting whether she planned to move out of state before the sale.
3. All of the following are limitations on crowdfunding offerings, except:
A. The offering may raise a maximum of $5 million.
B. A maximum of 100 investors may participate.
C. The amount a non-accredited investor can purchase is limited based on income and net worth.
D. Purchased securities cannot be resold until a year has passed, with some exceptions.
4. Does Rule 144A allow one QIB to sell restricted securities to another QIB? Why or why not?
A. Yes, because the buyer is a QIB
B. Yes, because the seller is a QIB
C. No, because the buyer is a QIB
D. No, because the seller is a QIB
5. An underwriting firm is advising a company that raised $75 million in a Reg A offering six months ago. The company wishes to conduct another Reg A offering, and the firm advises that the company wait another six months before doing so. Why is this g