Final answer:
Investment suitability for exempt securities refers to whether or not certain securities meet the criteria for being exempt from certain regulations. Exempt securities are typically offered only to accredited investors and often include securities issued by government entities, such as municipal bonds. Exempt securities are also subject to restrictions on resale.
Step-by-step explanation:
Investment suitability for exempt securities refers to whether or not certain securities meet the criteria for being exempt from certain regulations. One statement that is correct about investment suitability for exempt securities is that exempt securities are typically offered only to accredited investors. Accredited investors are individuals or entities that meet certain financial criteria, such as having a certain level of income or a certain net worth. Securities that are considered exempt are often not registered with the Securities and Exchange Commission (SEC), which means they are not subject to the same level of regulatory oversight as registered securities.
Another correct statement is that exempt securities usually include securities issued by government entities, such as municipal bonds. These securities are exempt from registration because they are considered to be less risky than other types of investments. Municipal bonds, for example, are often used to finance public infrastructure projects, and they are backed by the taxing authority of the issuing government.
One more correct statement is that exempt securities are often subject to restrictions on resale. This means that investors who purchase exempt securities may be limited in their ability to sell or transfer those securities to other investors. These restrictions are intended to protect investors and ensure that exempt securities are sold only to individuals who meet certain qualifications.