Question

Which of the following is not considered an accredited investor?

a) Any natural person whose annual income has been at least $200,000 for the two previous years and expects to make at least $200,000 in the current year.
b) Any individual with a net worth exceeding $1 million, either individually or jointly with their spouse.
c) A corporation, partnership, or organization with total assets exceeding $5 million.
d) An employee of a financial institution.

Answer 1

An employee of a financial institution is not considered an accredited investor unless they meet the specific income or net worth criteria or qualify under another defined category.

Step-by-step explanation:

The individual who is not considered an accredited investor is option (d): An employee of a financial institution. Accredited investors typically include natural persons with significant annual incomes or net worth, as well as various entities with substantial assets.

For natural persons, having an annual income of at least $200,000 in recent years or a net worth exceeding $1 million, either alone or with a spouse, qualifies them as accredited investors. Corporations, partnerships, or organizations with assets over $5 million also fall into this category. Being an employee of a financial institution does not automatically provide accredited investor status unless the individual meets the income or net worth criteria, or falls under another qualifying category defined by the regulations.