Investors purchase shares in a company that owns and rents vacation homes. The company manages all rental activity and distributes profits, but investors may, at their option, participate in rental decisions. Under the Howey Test and USA, are these shares a security?

1. AYes, because profits derive primarily from the company's efforts✓ Correct answer
2. BNo, because investors could participate in management
3. CNo, unless all investors are passive
4. DYes, only if profits are guaranteed

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