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To meet the Howey test, a financial product must be: (select all, if any, that apply)Group of answer choicesprofits come from the efforts of a promoter or a third partythere is an expectation of profitsan investment of moneythe investment is in a common or shared enterprise

Question

To meet the Howey test, a financial product must be: (select all, if any, that apply)Group of answer choicesprofits come from the efforts of a promoter or a third partythere is an expectation of profitsan investment of moneythe investment is in a common or shared enterprise

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Solution

All of the options apply. For a financial product to meet the Howey test, it must meet all of the following criteria:

  1. There is an investment of money.
  2. The investment is in a common or shared enterprise.
  3. There is an expectation of profits.
  4. The profits come from the efforts of a promoter or a third party.

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