A junior banker is reviewing an offering for registration in State C. Which of the following is TRUE regarding an exempt security versus an exempt transaction?

1. AAn exempt security is never subject to state anti-fraud provisions.
2. BAn exempt transaction may still involve a non-exempt security.✓ Correct answer
3. CIf the security is exempt, the transaction must also be exempt.
4. DOnly exempt securities can be sold in exempt transactions.

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