LGS 200 Final Exam Questions and
Answers Graded A+
Business Judgement Rule - Correct answer-Shields directors of a corporation from
liability as long as decision makers use due diligence..
Entrepreneur - Correct answer-A person who forms and operates a business
Major forms of conducting business - Correct answer-Sole proprietorship, general
partnership, limited partnership, limited liability limited partnership, limited
liability partnership, limited liability company, corporation
due diligence - Correct answer-"Checking things out": can come up when
investigating, buying property, or starting a new business
Securities act of 1933 - Correct answer-Regulates the issuance of securities
(including IPOs) by a corporation, general or limited partnership, unincorporated
association, or individual
Purpose of the securities act of 1933 - Correct answer-Provid full and honest
disclosure to investors
, Securities Exchange Act of 1934 - Correct answer-designed to prevent fraud in
subsequent trading of securities (insider trading), regulates securities exchanges,
brokers, and dealers. Requires continuous reporting to investors and SEC
IPO - Correct answer-Initial public offering, a corporation's first offer to sell shares
to the public
registration statement - Correct answer-a long, complex document that firms must
file with the SEC when they sell securities through a public offering
prospectus - Correct answer-written disclosure document submitted to the sec with
the registration statement, used by issuer as a selling tool (provided to potential
investors to allow them to evaluate the risk of the investment
Securities and Exchange Commission - Correct answer-federal agency empowered
to administer federal securities laws (adopts rules, investigates, regulates)
Sarbanes-Oxley Act - Correct answer-A law passed by Congress that requires the
CEO and CFO to certify that their firm's financial statements are accurate. Erects a
wall between investment bankers and securities analysts
short-swing profits - Correct answer-Profits made by statutory insiders during a
period of less than six months between purchase and sale. Corporation may bring
legal action to recover these short-swing profits
Answers Graded A+
Business Judgement Rule - Correct answer-Shields directors of a corporation from
liability as long as decision makers use due diligence..
Entrepreneur - Correct answer-A person who forms and operates a business
Major forms of conducting business - Correct answer-Sole proprietorship, general
partnership, limited partnership, limited liability limited partnership, limited
liability partnership, limited liability company, corporation
due diligence - Correct answer-"Checking things out": can come up when
investigating, buying property, or starting a new business
Securities act of 1933 - Correct answer-Regulates the issuance of securities
(including IPOs) by a corporation, general or limited partnership, unincorporated
association, or individual
Purpose of the securities act of 1933 - Correct answer-Provid full and honest
disclosure to investors
, Securities Exchange Act of 1934 - Correct answer-designed to prevent fraud in
subsequent trading of securities (insider trading), regulates securities exchanges,
brokers, and dealers. Requires continuous reporting to investors and SEC
IPO - Correct answer-Initial public offering, a corporation's first offer to sell shares
to the public
registration statement - Correct answer-a long, complex document that firms must
file with the SEC when they sell securities through a public offering
prospectus - Correct answer-written disclosure document submitted to the sec with
the registration statement, used by issuer as a selling tool (provided to potential
investors to allow them to evaluate the risk of the investment
Securities and Exchange Commission - Correct answer-federal agency empowered
to administer federal securities laws (adopts rules, investigates, regulates)
Sarbanes-Oxley Act - Correct answer-A law passed by Congress that requires the
CEO and CFO to certify that their firm's financial statements are accurate. Erects a
wall between investment bankers and securities analysts
short-swing profits - Correct answer-Profits made by statutory insiders during a
period of less than six months between purchase and sale. Corporation may bring
legal action to recover these short-swing profits
