SIE Knowledge of Capital Markets Practice Question 1
Question: 1
Which of the following is the main reason the Securities Act was enacted?
Correct Answer: D
Explanation:
D: The Securities Act was enacted after the stock market crash of 1929 to bring stability to the capital market. Choice A may be an indirect result of fair disclosure of new stock issues through registration with the Securities Exchange Commission (SEC). Choice B is not a main purpose of the Securities Act, although it could be an indirect benefit. Choice C could be an indirect result of the Securities Act if investors wishing to buy bonds feel greater confidence through reading the disclosures required by the 1933 act.
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