Legal Counselor Interview Questions and Answers

To check if a contract is a security, consider the characteristics and regulations surrounding securities.

• Look for the presence of investment of money

• Check if there is an expectation of profits

• Consider if the investment is in a common enterprise

• Examine if the profits are derived from the efforts of others

• Review applicable laws and regulations regarding securities

• Consult legal experts or regulatory authorities if unsure

A derivative is a financial contract whose value is derived from an underlying asset or group of assets.

• Derivatives are commonly used in financial markets for hedging, speculation, and arbitrage.

• Examples of derivatives include options, futures contracts, and swaps.

• Derivatives allow investors to gain exposure to the price movements of an asset without owning the asset itself.

• They can be used to manage risk by offsetting potential losses in one investment with gains in another....read more