LSB 3213 Exam 4 ACTUAL QUESTIONS
AND CORRECT ANSWERS
Security transactions involving the original issuance and reissuance of securities by a
business to raise capital are called the - CORRECT ANSWER Primary Market
A company is said to "go public" when it sells its voting ____ shares for the first time to
outside investors through use of public markets such as the New York Stock Exchange
(NYSE). - CORRECT ANSWER Common
The federal laws, regulations, and exemptions governing the primary market are found in the
Securities Act of ____? - CORRECT ANSWER 1933
____ investors hold securities directly or through a brokerage firm and ____ investors hold
securities through pension funds and mutual funds. - CORRECT ANSWER Individual,
institutional
The most common type of ____ are brokerage firms, referred to as broker-dealers, that buy
and sell securities on behalf of a client. - CORRECT ANSWER intermediaries
A public outcry and a growing lack of investor confidence in corporate financial disclosures
caused Congress to overhaul the entire corporate governance regulatory structure by passing
the: - CORRECT ANSWER The Sarbanes-Oxley Act of 2002
The public outcry over the Enron scandal and waning public confidence in the oversight of
financial frauds in the market led - ____ to pass several laws to improve the quality of
financial disclosure by public corporations. - CORRECT ANSWER Congress
Under Sarbanes-Oxley, requiring the payback of corporate bonuses that were awarded and
later found to be based on false disclosure is called a ____ provision. - CORRECT
ANSWER Clawback
AND CORRECT ANSWERS
Security transactions involving the original issuance and reissuance of securities by a
business to raise capital are called the - CORRECT ANSWER Primary Market
A company is said to "go public" when it sells its voting ____ shares for the first time to
outside investors through use of public markets such as the New York Stock Exchange
(NYSE). - CORRECT ANSWER Common
The federal laws, regulations, and exemptions governing the primary market are found in the
Securities Act of ____? - CORRECT ANSWER 1933
____ investors hold securities directly or through a brokerage firm and ____ investors hold
securities through pension funds and mutual funds. - CORRECT ANSWER Individual,
institutional
The most common type of ____ are brokerage firms, referred to as broker-dealers, that buy
and sell securities on behalf of a client. - CORRECT ANSWER intermediaries
A public outcry and a growing lack of investor confidence in corporate financial disclosures
caused Congress to overhaul the entire corporate governance regulatory structure by passing
the: - CORRECT ANSWER The Sarbanes-Oxley Act of 2002
The public outcry over the Enron scandal and waning public confidence in the oversight of
financial frauds in the market led - ____ to pass several laws to improve the quality of
financial disclosure by public corporations. - CORRECT ANSWER Congress
Under Sarbanes-Oxley, requiring the payback of corporate bonuses that were awarded and
later found to be based on false disclosure is called a ____ provision. - CORRECT
ANSWER Clawback
