Series 63 practice questioneasyHowey Test Elements
Which of the following is NOT a requirement of the Howey Test for an investment contract?
- AInvestment of money
- BCommon enterprise
- CExpectation of profit
- DGuaranteed returns by issuer✓ Correct answer
Explanation
Why D — Guaranteed returns by issuer
The Howey Test requires an investment of money, in a common enterprise, with expectation of profit from the efforts of others. Guaranteed returns are not a requirement for an investment contract to be a security.
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