SIE Understanding Products and Their Risks Question 34: Answer and Explanation

Question: 34

Which of the following acts included a security future in the definition of an equity security?

• A. 1933 Securities Act
• B. 1934 Securities Exchange Act
• C. 2000 Commodity Futures Modernization Act
• D. 2002 Sarbanes-Oxley (SOX) Act

Correct Answer: C

Explanation:

C: Choice C, the 2000 Commodity Futures Modernization Act, modified the definition of security to include a security future. Choice A regulates initial public offerings (IPOs). Choice B established the SEC and regulates the secondary market. Choice D clarified audit rules and CEO's responsibility for accuracy of financial statements.