Which of the following securities is exempt from registration under the Securities Act of 1933?
a. Shares of nonvoting common stock, provided their par value is less than $1.00.
b. A class of stock given in exchange for another class by the issuer to its existing stockholders without the issuer paying a commission.
c. Limited partnership interests sold for the purpose of acquiring funds to invest in bonds issued by the United States.
d. Corporate debentures that were previously subject to an effective registration statement, provided they are convertible into shares of common stock.
Answer:B
Securities exchanged for other securities by the issuer exclusively with its existing shareholders are exempt from registration under the 1933 Act as long as no commission is paid and both sets of securities are issued by the same issuer.
Answer (a) is incorrect because nonvoting common stock is not exempted under the Act. The amount of the par value is irrelevant.
Answer (c) is incorrect because although the securities of governments are themselves exempt, the limited partnership interests are not.
Answer (d) is incorrect because no such exemption is allowed.