Regulation D provides for important exemptions to registration
of securities under the Securities Act of 1933. Which of the
following would be exempt?
I. Issuance of $500,000 of securities sold in a 12-month period
to forty investors.
II. Issuance of $2,000,000 of securities sold in a 12-month
period to 10 investors. The issuer restricts the right of the
purchasers to resell for two years.

(c) The issuance described in I is exempt because
Rule 504 exempts an issuance of securities up to $1,000,000 sold
in a 12-month period to any number of investors. The issuer is
not required to restrict the purchasers’ resale. The issuance described
in II is also exempt because Rule 505 exempts an issuance
up to $5,000,000 sold in a 12-month period. It permits sales to
35 unaccredited investors and to any number of accredited investors.
Since there were only 10 investors, this is met. The issuer
also restricted the purchasers’ right to resell for two years as required.