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BLAW 3310 FINAL QUIZ REVIEW questions and answers verified answers||Latest 2024/2025
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BLAW 3310 FINAL QUIZ REVIEW questions and answers verified answers||Latest 2024/2025
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BLAW 3310 FINAL QUIZ REVIEW1. Bob is an investment adviser under SEC rules with power to trade funds in John's stock
account. Bob makes a small (i.e.1%) commission on every trade (buy or sell) he makes for his
client. Bob makes many trades for John and in total invests $1,000,000 of John's money. After a
year, Bob has made $25,000 in commissions but the value of John's account has shrunk to
$900,000. This is an example of ___________________ - ANSchurning
Explanation: occurs when a broker who has control of a client's account buys and sells an
excessive amount of stock to make money from the commissions earned on transactions.
Vronsky is an executive at ABC Company. On January 1, 2018, he was given options by ABC
allowing him to buy up to 1,000 shares of ABC shares at any time during 2018 at a price of $ 40
per share. (On the day he was given these options, the market share price was $28 per share.)
On December 1, 2018, the market share price was $52, and John exercised his option to buy all
1,000 shares on that date. What was his profit? - ANS$12,000
Explanation: (Market share price - strike price) * # of shares
The general rule is that all "securities" as defined under federal securities law may be sold only
after a _________________is filed with the _______ and approved. The blanks in order should
be _______________. - ANSRegistration statement...US Securities and Exchange Commission
Explanation: The registration statement for a new security offering has two parts: The first part is
the prospectus, a document providing the legal offering of the sale of the security. The second
part is detailed information required by the SEC.
Macy's advertises "Pendleton Dresses on Sale at 20% Off on December 20-Limited Quantity
Available So Come When Store Opens at 10:00 AM." Sally has always wanted a fancy
Pendleton dress and goes there at 10:10 AM and is told they are out of Pendleton dresses but
she can buy a new Mars brand dress which is stated by the clerk to be "an ever-better dress
than Pendleton" This appears to be a case of___________________. - ANSThe "bait and
switch" sales method.
Explanation: a business will advertise prices or rates which are exceptionally low in order to
garner attention and motivate customers to inquire.
John's car breaks down. He takes it to Bob's Car Shop where they say he needs a new "cluster"
and he is charged $1,500 for its installation. His friend later says that was a scam-no "cluster"
was needed, car was easily fixable. He is furious. John can bring a Texas DTPA claim seeking
his maximum damages of: __________. - ANS$4,500
Explanation: you are awarded triple the damages you paid.
The Truth in Lending Act_________________________. - ANSMandates that a written
disclosure in advance of the "actual costs" (finance charges) of borrowing be given to the buyer
of a car on credit
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