FlexiQuiz - QAI - Module #2 Quiz

1. What is the primary factor that distinguishes private investments from public investments?

Risk

Valuation

Regulation

Liquidity

2. What is the primary role of the U.S. Securities and Exchange Commission (SEC)?

Regulating the cryptocurrency market

Promoting private market investments and protecting investors

Protecting investors, maintaining fair markets, and facilitating capital formation

Overseeing public company financial disclosures

3. What is the primary purpose of the Howey test in securities regulation?

To calculate potential returns on investments

To identify accredited investors

To assess the liquidity of an investment

To determine if an investment is a security

4. What is the maximum amount a company can raise in a Tier 2 Regulation A (Reg A) offering within a 12-month period?

$5 million

$20 million

$10 million

$75 million

5. Which of the following investments is NOT considered a security under the Howey test?

Options

Stocks

Real Estate

Bonds

6. What is the primary purpose of Regulation D under the SEC's regulations?

To allow capital raising without the need for SEC registration

To restrict private company investments

To facilitate public offerings

To regulate cryptocurrency transactions

7. What is the maximum amount a company can raise in a RegCF offering within a 12-month period?

$10 million

$1 million

$5 million

$20 million

8. Which of the following is NOT a risk associated with investing in private companies?

Illiquidity

Possibility of fraud

High disclosure requirements

Uncertain valuation

9. What does the SEC primarily regulate in terms of securities offerings?

Real estate investments

Both public and private offerings

Public offerings

Private offerings

10. Who can invest up to 10% of their annual income or net worth in Regulation Crowdfunding (Reg CF) offerings?

Financial professionals

Accredited investors only

Non-accredited investors only

Both accredited and non-accredited investors

11. What is the main purpose of state securities laws, often referred to as "Blue Sky Laws"?

Regulating the cryptocurrency market

Protecting investors from fraud in federal securities offerings

Ensuring companies provide accurate financial reports

Protecting investors against fraudulent sales practices and activities

12. Under Rule 506(b) of Regulation D, how many non-accredited investors can participate in a securities offering within a 90-calendar-day period?

Up to 25

Up to 10

Unlimited

Up to 35

13. Which of the following is NOT one of the elements of the Howey test used by the SEC to determine whether an investment is a security?

Expectation of profits

Direct ownership by investors

Investment of money

Common enterprise

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