Legal Environment in Business > QUESTIONS & ANSWERS > Orion 65 Exam 1 - Section 1&2 with complete solution 2022 (All)

Orion 65 Exam 1 - Section 1&2 with complete solution 2022

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Orion 65 Exam 1 - Section 1&2 with complete solution 2022 Securities Definition -Answer- Investment Contract that meets four requirements: 1. Investment of Money 2. in a common enterprise 3. Wit ... h and expectation of Profits 4. that results solely from the efforts of others SEC Authority and Oversight -Answer- SEC was Crreated by the Securities Exchange Act of 1934. Authority over all aspects of the securities industry, and Disciplinary power. Administrates all federal laws. Power to investigate possible violations Municipal Securities -Answer- Direct obligations of, or guaranteed as principal interest by a state or political subdivision Government securities -Answer- Direct obligation or principal interest of gevernment Agency Churning -Answer- Excessive trading of a client's account. Churning increases the broker's commissions but usually leaves the client worse off or no better off than before. Churning is illegal under SEC and NASD rules. Matched Orders -Answer- Illegal manipulative practice of offsetting buy and sell orders to create the impression of activity in a security, causing upward price movement that benefits the participants. 12b-1 fees -Answer- annual fees charged by a mutual fund to pay for marketing and distribution costs No Load < .25% < .75% max IPO (initial public offering) -Answer- the first sale of stock by a private company to the public Underwriter -Answer- any person who has purchased from an issuer with a view to selling. not a brokerage firm Issuer -Answer- the individual or business organization offering a security for sale to the public [Show More]

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