Answered

What did the Federal Securities Act and the Securities and Exchange Commission aim to do?


AProhibit completely the sale of stocks on margin (i.e., with borrowed funds)
BForce stockbrokers to register with the federal government
CPrevent interlocking directorates and business pyramiding schemes
DProvide buyers and sellers with reliable information on publicly sold stocks

Verified Answer :

Final answer:

The Federal Securities Act aimed to regulate the securities industry to protect investors by enhancing transparency, while the Securities Exchange Commission was established to enforce securities laws. Together, they sought to ensure that investors received reliable information about publicly traded stocks. The correct answer to the student's question is option OD.


Explanation:

Understanding the Federal Securities Act and the Securities Exchange Commission


The Federal Securities Act, enacted in 1933, aimed to provide a framework for regulating the securities industry and to protect investors from fraudulent activities. It required companies to register their securities with the federal government and provide detailed financial information to enhance transparency.


The Securities Exchange Commission (SEC) was created in 1934 as a response to the stock market crash of 1929 and aimed to foster trust in the financial markets. Its main goals were to enforce federal securities laws and to regulate the securities industry, ensuring that investors received reliable information about publicly traded stocks.


Among the options provided, the most accurate statement is:



  1. OD: Provide buyers and sellers with reliable information on publicly sold stocks.


Learn more about Federal Securities Act and SEC here:

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