SIE Knowledge of Capital Markets Practice Question 18

Correct Answer: C

Explanation:

C: Choice C is correct. Five out of the seven directors are appointed by the President. They must also be approved by the Senate. One is appointed by the Secretary of the Treasury. One is appointed by the Federal Reserve Board. Choice A is incorrect because prospectus filing is required by the Securities Act of 1933, not the SIPA. Choice B is incorrect because it was re-establishing the willingness of investors to buy securities by protecting them, with limits, from bankruptcy of their broker-dealer. Choice D is incorrect because it did not guarantee against loss of market value.