SIE Knowledge of Capital Markets Practice Question 13

Correct Answer: D

Explanation:

D: Choice D correctly describes one requirement of the 1933 Securities Act, fair disclosure of new stock issues. Choice A is incorrect because the 1933 Securities Act was enacted to encourage investment in the stock market. It was the first act of Congress to regulate securities at a national level. Choice B is incorrect because the 1933 Securities Act did not encourage more speculation, and the 1934 Securities Exchange Act did not replace the 1933 Securities Act. The 1933 Act regulated the primary market by requiring, for each primary offering, complete and honest documentation to the investor community about the security to be issued by an issuer. Choice C is incorrect because, during the 1920's, business expansion was accompanied by an increasing level of speculation in the stock market.