Holly Corp. engaged Yost & Co., CPAs, to audit the financial statements to be included in a registration statement Holly was required to file under the provisions of the Securities Act of 1933. Yost failed to exercise due diligence and did not discover the omission of a fact material to the statements. A purchaser of Holly's securities may recover from Yost under Section 11 of the Securities Act of 1933 only if the purchaser
A. Brings a civil action within 1 year of the discovery of the omission and within 3 years of the offering date.
B. Proves that the registration statement was relied on to make the purchase.
C. Proves that Yost was negligent.
D. Establishes privity of contract with Yost.
Answer: A. Brings a civil action within 1 year of the discovery of the omission and within 3 years of the offering date.
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The Century 22 fund has invested in a portfolio of mortgage-backed securities that has a current market value of $245 million. The duration of this portfolio of mortgaged back securities is 14.7 years
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