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Exam Code: Series7 Practice exam 2022 by team
Series7 General Securities Representative Series 7

Exam ID : Series7
Exam Title : General Securities Representative Series 7
Questions : 135 (125 Scored)
Unscored : 10
Duration : 3 hrs 45 min.

The Series 7 exam is designed to assess the competency of entry-level General Securities Representatives. The Series 7 exam seeks to measure the degree to which each candidate possesses the knowledge, skills and abilities needed to perform the critical functions of a General Securities Registered Representative. In order to obtain registration as a General Securities Representative, candidates must pass both the Series 7 exam and a general knowledge co-requisite, the Securities Industry Essentials (SIE) exam.

Seeks Business for the Broker-Dealer from Customers and Potential Customers 7%
Opens Accounts After Obtaining and Evaluating Customers Financial Profile and Investment Objectives 9%
Provides Customers with Information About Investments, Makes Suitable Recommendations, Transfers Assets and Maintains Appropriate Records 73%
Obtains and Verifies Customers Purchase and Sales Instructions and Agreements; Processes, Completes and Confirms Transactions 11%

The exam is administered via computer. A tutorial on how to take the exam is provided prior to taking the exam. Each candidates exam includes 10 additional, unidentified pretest items that do not contribute toward the candidate's score. The pretest items are randomly distributed throughout the exam. Therefore, each candidates exam consists of a total of 135 items (125 scored and 10 unscored). There is no penalty for guessing. Therefore, candidates should attempt to answer all items. Candidates will be allowed 3 hours and 45 minutes to complete the Series 7 exam. All candidate test scores are placed on a common scale using a statistical adjustment process known as equating. Equating scores to a common scale accounts for the slight variations in difficulty that may exist among the different sets of exam items that candidates receive. This allows for a fair comparison of scores and ensures that every candidate is held to the same passing standard regardless of which set of exam items they received. Candidates are not permitted to bring reference materials to their testing session. Severe penalties are imposed on candidates who cheat or attempt to cheat on FINRA-administered exams.

Course Outline, exam Syllabus

Function 1: Seeks Business for the Broker-Dealer from Customers and Potential Customers
1.1 Contacts current and potential customers in person and by telephone, mail and electronic means; develops promotional and advertising materials and seeks appropriate approvals to distribute marketing materials
Knowledge of:
 Standards and required approvals of public communications
 Types of communications (e.g., retail, institutional, correspondence)
 Seminars, lectures and other group forum requirements
 Product specific advertisements and disclosures
 Investment company products and variable contracts
 Options-related communications; options disclosure document (ODD)
 Municipal securities
 Research reports (e.g., quiet periods, distribution, third-party research)
 Government securities, collateralized mortgage obligations (CMOs), certificates of deposit (CDs)
– Communications with the Public
– Communications with the Public about Variable Life Insurance and Variable Annuities
– Use of Investment Companies Rankings in Retail Communications
– Requirements for the Use of Bond Mutual Fund Volatility Ratings
– Communications with the Public about Collateralized Mortgage Obligations (CMOs)
– Options Communications
– Members Responsibilities Regarding Deferred Variable Annuities
– Options
SEC Rules and Regulations
Securities Act of 1933
Section 5 – Prohibitions Relating to Interstate Commerce and the Mails
156 – Investment Company Sales Literature
482 – Advertising by an Investment Company as Satisfying Requirements of Section 10
498 – Summary Prospectuses for Open-End Management Investment Companies
Securities Exchange Act of 1934
15c2-12 – Municipal Securities Disclosure
15c3-3 – Customer Protection — Reserves and Custody of Securities
Cboe Rules
9.8 – Addressing of Communications to Customers
9.9 – Delivery of Current Options Disclosure Documents
9.15 – Options Communications
G-21 – Advertising
1.2 Describes investment products and services to current and potential customers with the intent of soliciting business Knowledge of:
 Process for bringing new issues to market (e.g., due diligence, registration statement, preliminary prospectus, final prospectus, underwriting agreement, selling group agreement, blue-sky laws and procedures)
 Regulatory requirements for initial public offerings (IPOs) (e.g., restrictions on prospecting or soliciting, allowable communications with the public)
 Primary financing for municipal securities (e.g., competitive sale, negotiated sale, private offering, advance refunding)
 Syndicate formation and operational procedures (e.g., purpose of syndicate bid, roles and responsibilities of underwriters, selling group concession and reallowance)
 Pricing practices and components of underwriters spread and determination of underwriters compensation and selling practices
 Prospectus requirements (e.g., timeliness of information, preliminary prospectus (red herring), final prospectus)
 Information required in a registration statement and offering material on new issue (e.g., in pre-filing period, in cooling-off period, in post-registration period)
 Official statements, preliminary official statements, notice of sale for municipal securities
 Qualified institutional buyer (QIB) and accredited investor
 Qualification requirements for Regulation A offerings (e.g., filing of abbreviated registration statement and offering circular
 Regulation D offerings (e.g., exemption from SEC registration, access to capital markets, accredited investors)
 Securities and transactions exempted from registration, including Section 3(a)(11) of the Securities Act of 1933 and Rule 147 thereunder (i.e., intrastate offering)
 Regulatory requirements for private placements or resales
 Nonregistered foreign securities sold to institutions qualified in the U.S.
 Foreign securities prohibited from being sold to U.S. investors
– Networking Arrangements Between Members and Financial Institutions
– Tape Recording of Registered Persons by Certain Firms
– Corporate Financing Rule — Underwriting Terms and Arrangements
– Public Offerings of Securities with Conflicts of Interest
– Restrictions on the Purchase and Sale of Initial Equity Public Offerings
– New Issue Allocations and Distributions
– Sale of Securities in a Fixed Price Offering
– Disclosure of Price and Concessions in Selling Agreements
– Notification Requirements for Offering Participants
SEC Rules and Regulations
Securities Act of 1933
Section 3 – Exempted Securities
Section 4 – Exempted Transactions
– Communications Not Deemed a Prospectus
– Options Material Not Deemed a Prospectus
– Persons Deemed Not To Be Engaged in a Distribution and Therefore Not Underwriters
– Private Resales of Securities to Institutions
– Reclassification of Securities, Mergers, Consolidations and Acquisitions of Assets
– Intrastate Offers and Sales
– Post-filing Free Writing Prospectuses in Connection with Certain Registered Offerings
Securities Exchange Act of 1934
– Prohibition of Use of Manipulative or Deceptive Devices or Contrivances with Respect to Certain Securities Exempted from Registration
– Employment of Manipulative and Deceptive Devices by Brokers or Dealers
– Purchases of Certain Equity Securities by the Issuer and Others
– Delivery of Prospectus
– Records To Be Made by Certain Exchange Members, Brokers and Dealers
Regulation A – Conditional Small Issues Exemption
Regulation C – Registration
– Delayed or Continuous Offering and Sale of Securities
– Contents of Prospectus Used After Nine Months
– Prospectus for Use Prior to Effective Date
– Prospectus in a Registration Statement at the Time of Effectiveness
– Prospectus in a Registration Statement After Effective Date
– Conditions to Permissible Post-filing Free Writing Prospectuses
Regulation D – Rules Governing the Limited Offer and Sale of Securities Without Registration Under the Securities Act of 1933
– Use of Regulation D
– Definitions and Terms Used in Regulation D
– General Conditions to be Met
– Filing of Notice of Sale
– Exemption for Limited Offerings and Sales of Securities Not Exceeding $5,000,000
– Exemption for Limited Offers and Sales Without Regard to Dollar Amount of Offering
– Disqualifying Provision Relating to Exemptions under Rules 504 and 506
– Insignificant Deviations from a Term, Condition or Requirement of Regulation D
Regulation M
Regulation S – Rules Governing Offers and Sales Made Outside the United States Without Registration Under the Securities Act of 1933
Trust Indenture Act of 1939
MSRB Rules
– Primary Offering Practices
– Transactions with Employees and Partners of Other Municipal Securities Professionals
– Disclosures in Connection with Primary Offerings
– CUSIP Numbers, New Issue, and Market Information Requirements
– Solicitation of Municipal Securities Business
Function 2: Opens Accounts After Obtaining and Evaluating Customers Financial
Profile and Investment Objectives
2.1 Informs customers of the types of accounts and their appropriateness and provides
disclosures regarding various account types and restrictions
Knowledge of:
 Types of accounts (e.g., pattern day trading, prime brokerage, delivery verses payment/receive versus payment (DVP/RVP), advisory or fee-based)
 Account registration types (e.g., tenants in common (TIC), community property, sole proprietorship, partnership, unincorporated associations)
 Requirements for opening customer accounts
 Retirement plans and other tax advantaged accounts
 Transfers, rollovers, eligibility, distribution strategies and taxation (e.g., types of allowable contributions, distribution options, taxation of distribution at retirement, age restrictions for distributions, permissible investments)
 Employer-sponsored plans and ERISA (e.g., 457, defined benefit, profit-sharing, stock options and stock purchase, non-qualified deferred compensation programs)
 Wealth events (e.g., inheritance)
 Account registration changes and internal transfers
2270 – Day-trading Risk Disclosure Statement
2130 – Approval Procedures for Day-trading Accounts
4512 – Customer Account Information
4514 – Authorization Records for Negotiable Instruments Drawn from a Customers Account
4515 – Approval and Documentation of Changes in Account Name or Designation
Cboe Rule
9.1 – Opening of Accounts
Internal Revenue Code
219 – Retirement Savings
415 – Limitations on Benefits and Contributions Under Qualified Plans
529 – Qualified Tuition Programs
530 – Coverdell Education Savings Accounts
Employee Retirement Income Security Act of 1974 (ERISA)
2.2 Obtains and updates customer information and documentation, including required legal
documents and identifies and escalates suspicious activity
Knowledge of:
 Customer screening (e.g., customer identification program (CIP), know-your-customer (KYC), domestic or foreign residency and/or citizenship, corporate insiders, employees of broker-dealers or self-regulatory organizations (SROs))
 Information security and privacy regulations (e.g., initial privacy disclosures to customers, opt-out notices, disclosure limitations, exceptions)
 Account authorizations (e.g., power of attorney (POA), trust documents, corporate resolutions, trading authority, discretionary account documents)
408T – Discretionary Power in Customers Accounts
2090 – Know Your Customer
3260 – Discretionary Accounts
SEC Rules and Regulations
Securities Exchange Act of 1934
Section 3(a)(35) – Definitions and Application of Title – “Investment Discretion”
Regulation S-P – Privacy of Consumer Financial Information and Safeguarding Personal Information
Cboe Rule
9.4 – Discretionary Accounts
2.3 Makes reasonable efforts to obtain customer investment profile information including, but not limited to, the customer's other security holdings, financial situation and needs, tax status and investment objectives
Knowledge of:
 Essential facts regarding customers and customer relationships
 Financial factors relevant to assessing a customers investment profile
 Security holdings, other assets and liabilities, annual income, net worth, tax considerations
 Other considerations (e.g., age, marital status, dependents, employment, investment experience, home ownership and financing, employee stock options, insurance, liquidity needs)
 Investment objectives (e.g., preservation of capital, income, growth, speculation)
 Reasonable-basis suitability, customer-specific suitability and quantitative suitability
 Investment strategies and recommendations to hold
 Verification of investor accreditation and sophistication
2111 – Suitability
2214 – Requirements for the Use of Investment Analysis Tools
G-19 – Suitability of Recommendations and Transactions
2.4 Obtains supervisory approvals required to open accounts
Knowledge of:
 Required review, approvals and documentation for account opening and maintenance
 Physical receipt, delivery and safeguarding of cash or cash equivalents, checks and securities
 Circumstances for refusing or restricting activity in an account or closing accounts
3110 – Supervision
3120 – Supervisory Control System
Cboe Rule
9.2 – Supervision of Accounts
G-27 – Supervision
Function 3: Provides Customers with Information About Investments, Makes Suitable
Recommendations, Transfers Assets and Maintains Appropriate Records
3.1 Provides customers with information about investment strategies, risks and rewards, and communicates relevant market, investment and research data to customers
Knowledge of:
 Customer-specific factors that generally affect the selection of securities (i.e., customers investment profile, including the customers risk tolerance, investment time horizon and investment objectives, liquidity needs)
 Portfolio or account analysis and its application to security selection (e.g., diversification, asset allocation principles, concentration, volatility, potential tax ramifications)
 Portfolio theory (e.g., alpha and beta considerations, Capital Asset Pricing Model (CAPM))
 Delivery of annual reports and notices of corporate actions (e.g., dividends, splits, odd lot tenders)
 Fundamental analysis of financial statements and types of financial statements included in an annual report, importance of footnotes, material risk disclosures and key terms (e.g., assets, liabilities, capital, cash flow, income, earnings per share (EPS), book value, shareholders' equity, depreciation, depletion, goodwill)
 Balance sheet and methods of inventory valuation: last-in, first out (LIFO), first-in, first-out (FIFO) and methods of depreciation
 Income statement and calculations derived from an income statement: earnings before interest and taxes (EBIT); earnings before taxes (EBT); net profit; and earnings before interest, taxes, depreciation and amortization (EBITDA)
 Principal tools to measure financial health
 Liquidity: working capital, current ratio, quick assets, acid test ratio
 Risk of bankruptcy: bond ratio, debt-to-equity ratio
 Efficient use of assets: inventory turnover ratio, cash flow
 Profitability: margin-of-profit ratio, net profit ratio, asset coverage and safety of income (i.e., net asset value (NAV) per bond, bond interest coverage, book value per share)
 EPS: fully diluted EPS, price-earnings (P/E) ratio, dividend payout ratio, current yield
 Competitiveness (comparative performance): return on common equity
SEC Rules and Regulations
Securities Exchange Act of 1934
14e-3 – Transactions in Securities on the Basis of Material, Nonpublic Information in the Context of Tender Offers
14e-4 – Prohibited Transactions in Connection with Partial Tender Offers Cboe Rule
9.3 – Suitability of Recommendations
3.2 Reviews and analyzes customers' investment profiles and product options to determine suitable investment recommendations
Knowledge of:
Equity securities
 Types of stock (e.g., authorized, issued, outstanding, Treasury stock, stated value)
 Characteristics of common stock
 Rights of common stockholders (e.g., pre-emptive right, pro rata share of dividends, access to corporate books, voting power (statutory, cumulative, nonvoting), residual claims on corporate assets)
 Spinoffs
 Stock acquired through a consolidation or transfer
 Penny stocks and rules associated with penny stock transactions
 Characteristics of preferred stock
 Types of preferred stock (e.g., cumulative, non-cumulative, participating, nonparticipating, convertible, callable, adjustable-rate and variable-rate)
 Rights of preferred stockholders (e.g., preference upon corporate dissolution, dividend payment, conversions, sinking fund provisions)
 Rights and warrants: origination, exercise terms, relationship of subscription price to market price of underlying stock, anti-dilution agreement
 Electronic exchanges or auction markets (e.g., electronic communications networks (ECNs), over-thecounter (OTC), dark pools of liquidity)
 Types and characteristics of non-U.S. market securities (e.g., American Depositary Receipts (ADRs), corporate equity)
 Tax treatment of equity securities transactions
 Capital gains and losses, dividend distributions (qualified and non-qualified), wash sales, holding periods
 Determination of net long-term and short-term gains or losses
 When-issued securities, securities acquired through conversion
 Calculation of cost basis per share on: purchases, exchange of convertibles for common shares, stock dividends and stock rights, inherited or gifted securities
 Cost valuation: FIFO, LIFO, identified shares
Packaged products  Investment companies, exchange-traded funds (ETFs), unit investment trusts (UITs)
 Types of mutual funds: equity, fixed income, money market, interval
 Structure of investment companies (e.g., open-end and closed-end funds)
 Fund objectives (e.g., value, growth, income, balanced, international, sector, life cycle)
 Characteristics of:
 Open-end funds: e.g., NAV, forward pricing, offering price, exchange privileges within families of funds, fees and expenses: no load, load (front-end, back-end), distribution fees, management fees, nature of 12b-1 fees
 Closed-end funds: distributed in primary market at IPO price, traded in secondary market
 Sales practices (e.g., dollar-cost averaging (DCA), computing sales charge, breakpoints)
 Redemption (e.g., redemption price, payout or withdrawal plans, conversion privilege, restrictions, contingent deferred sales charge, tenders)
 Tax treatment of mutual funds
 Reinvestment of dividends and capital gain distributions
 Charges and expenses
 Variable life insurance/annuity contracts
 Characteristics and insurance features (e.g., minimum guarantees, death benefits, living benefits, riders)
 Separate accounts (e.g., purpose, management of portfolio, investment policies, performance of account)
 Valuation of a variable annuity contract (e.g., accumulation units, surrender value, annuitization units)
 Purchasing or exchanging variable annuities (e.g., immediate annuity, charges, fees, penalties, right of accumulation (ROA), waiver of premium)
 Annuitization: types of election, variable payout, assumed interest rate, relationship between assumed interest rate and genuine rate of return
 Tax treatment of variable annuity contracts during accumulation period and annuity period and taxation at surrender of contract
 Real estate investment trusts (REITs)
 Structure (e.g., finite number of shares, distributed in primary market at IPO price, traded in secondary market, premiums and discounts to NAV)
 Types and characteristics (e.g., equity REIT, mortgage REIT, hybrid REIT)
 Tax treatment (e.g., dividends, capital gains, distributions)
 Direct participation programs (DPPs)
 General characteristics
 Structures (e.g., limited partnerships (e.g., roles and duties of general partners vs. limited partners), limited liability companies, corporations that have tax pass-through exemption from the IRS)
 Tax treatment (e.g., flow-through of income, expenses and tax liability, real estate depreciation, oil and gas tax advantages)
 Types of DPPs (e.g., real estate, oil and gas, small-cap debt and equity, business development companies (BDCs), equipment leasing) and their investment advantages, risks and tax implications
 Types of DPP offerings (i.e., private placements and public offerings)
 Evaluation of DPPs (e.g., economic soundness of the program, expertise of the general partner, basic objectives of the program; start-up costs, leverage and other revenue considerations) Options
 Listed options and their characteristics (e.g., contract specifications and adjustments, dividends, exercise/assignment, settlement date, opening and closing transactions, values (premium, intrinsic and time), volume, open interest, position limits, exercise limits)
 The Options Clearing Corporation (OCC)
 American-style and European-style
 Long-term Equity AnticiPation Securities (LEAPS)
 Basic strategies (e.g., covered writing and hedging for equity, index, foreign currency and yield-based options)
 Protective put for equity and index options
 Covered call and put writing for equity options
 Advanced strategies (e.g., spreads, straddles, combinations, uncovered writing)
 Long (debit) and short (credit) spreads
 Straddle/combination for equity and index options
 Uncovered (naked) call or put writing for equity, index and yield-based options
 Profit and loss calculations, break-even points, economics of positions
 Tax treatment of option transactions (equity, index, foreign currency, yield-based)
Debt Securities
 Types of debt securities and money market instruments (e.g., corporate commercial paper, brokered CDs, Eurodollar bond, variable-rate preferreds)
 Characteristics: structure, risks and rewards, call provisions
 Structured products (e.g., equity-linked securities, exchange-traded notes (ETNs))
 Types and characteristics of non-U.S. market securities (e.g., sovereign and corporate debt)
 Types of yields (e.g., coupon (nominal), current, yield to maturity (YTM), yield to call (YTC), yield to worst and discount yield, calculations and relationship to price)
 Bond ratings
 Tax implications of taxable debt securities, including original issue discount (OID) rules, interest, principal, premiums, discounts, and capital gains and losses
Corporate bonds
 Types of corporate bonds (e.g., mortgage bonds, equipment trust certificates, debentures, step coupon bonds, zero-coupon bonds, convertible bonds, high-yield bonds, income bonds) and their characteristics
 Convertible bonds: general characteristics, (e.g., conversion privilege, fixed versus variable, conversion ratio or price, calculation of parity price of underlying security, arbitrage, factors influencing conversion)
Municipal securities
 General characteristics of municipal fund securities, method of quotations (e.g., yield/basis price, dollar price), interest rate, payment periods, denominations, diversity of maturities (e.g., serial, term) and legal opinion (purpose and contents)
 Analysis and diversification of municipal investments: geographical, type and rating
 Analysis of general obligation (GO) bonds, including: characteristics of the issuer, nature of the issuers debt, factors affecting the issuers ability to pay, municipal debt ratios
 Analysis of revenue bonds, including feasibility studies, sources of revenue, security (protective covenants of bond indenture), financial reports and outside audits, restrictions on the issuance of additional bonds, flow of funds, earnings coverage, sources of credit information, rating services, credit enhancements
 Purpose and characteristics of specific types of municipal securities:
 Types of municipal bonds (e.g., GO bonds, limited tax GO bonds and notes, revenue bonds, short-term municipal obligations (e.g., tax anticipation notes (TANs), bond anticipation notes (BANs), revenue anticipation notes (RANs), tax-exempt commercial paper, grant anticipation notes (GANs), tax and revenue anticipation notes (TRANs)))
 Special tax, special assessment, moral obligation, advance or pre-refunded, double-barreled, taxable (e.g., Build America bonds), OIDs, zero-coupon (capital appreciation) bonds, certificates of participation (COPs), alternative minimum tax (AMT), lease revenue, variable rate securities, auction rate securities
 Municipal fund securities including 529 college savings plans, local government investment pools (LGIPs), ABLE accounts (e.g., change in beneficiary, rollovers, ownership, tax consequences of unqualified withdrawals)
 Call features (e.g., par or premium, optional, mandatory, partial call, sinking fund, extraordinary calls, make whole calls), advantages/disadvantages to issuers and investors
 Put or tender options
 Refunding methods: direct exchange versus sale of new issue, advance refunding, refunding at call dates/current refunding, escrowed to maturity, crossover refunding
 Factors affecting the marketability of municipal bonds: rating, maturity, call features, interest (coupon) rate, block size, liquidity (ability to sell the bond in the secondary market), dollar/yield price, issuer name (local or national reputation), credit enhancement, credit and liquidity support, denominations
 Pricing of municipal securities and other mathematical calculations: dollar price, accrued interest (regular coupon, odd first coupon), computations of accrued interest (30/360), amortization of premium, accretion of discount, relationship of bond prices to changes in maturity, coupon, various yield calculations (taxable equivalent yield, net yield after capital gains tax, current yield, YTC on premium bonds) value of basis point, in default,
 Tax treatment of municipal securities: securities bought at a discount or premium in the secondary market, OID, federal income tax status, state and local tax status, computation of taxable equivalent yield, accrued interest, AMT, bonds, taxable bonds, bank qualified bonds Registered hedge funds and fund of funds
 Structure (e.g., private placements, registered, exemption from registration under the Investment Company Act of 1940, blind pool/ blank check)
 Characteristics (e.g., limited or no liquidity, limited available information, lock-up provisions, charges and expenses, tangible assets, wide array of investment styles, models and vehicles)
 Tax treatment of distributions
Asset-backed securities
 Collateralized mortgage obligations (CMOs)
 Collateralized debt obligations (CDOs)
 Characteristics (e.g., indenture, maturities, form of ownership, interest payment periods, call and put features, calculation of accrued interest, and specific characteristics (e.g., maturity, type of collateral, priority of claim, call provisions))
U.S. Treasury securities
 Treasury bills, notes, bonds
 Treasury receipts (Separate Trading of Registered Interest and Principal Securities (STRIPS)/zero-coupon)
 Treasury Inflation Protected Securities (TIPS)
 Characteristics (e.g., types, maturities, denominations, payment of interest)
U.S. government agency securities
 Government National Mortgage Association (GNMA)
 Federal National Mortgage Association (FNMA)
 Federal Home Loan Mortgage Corporation (FHLMC)
 Student Loan Marketing Association (SLMA)
 Characteristics: types, maturities, denominations, primary dealers, distribution, issue form, quotations, passthrough, calculating a spread, pricing, payment of interest and principal
2114 – Recommendations to Customers in OTC Equity Securities
2121 – Fair Prices and Commissions
2122 – Charges for Services Performed
2124 – Net Transactions with Customers
2310 – Direct Participation Programs
2320 – Variable Contracts of an Insurance Company
2341 – Investment Company Securities
2350 Series – Trading in Index Warrants, Currency Index Warrants, and Currency Warrants 4210(f)(2) – Definitions Related to Options, Currency Warrants, Currency Index Warrants and Stock Index Warrant Transactions
SEC Rules and Regulations
Securities Exchange Act of 1934
Section 9(a) – Prohibition Against Manipulation of Security Prices (Transactions Relating to Purchase or Sale of Security)
Exemption of Certain Issuers from Section 15(D) of the Act
3a51-1 – Definition of "Penny Stock"
15g-1 – Exemptions for Certain Transactions
15g-2 – Penny Stock Disclosure Document Relating to the Penny Stock Market
15g-5 – Disclosure of Compensation of Associated Persons in Connection with Penny Stock Transactions
15g-9 – Sales Practice Requirements for Certain Low-priced Securities
Investment Company Act of 1940
Section 2(a) – General Definitions
Section 10 – Affiliations or Interest of Directors, Officers and Employees
Section 12(a) – Functions and Activities of Investment Companies (Purchase of Securities on Margin;
Joint Trading Accounts; Short Sales of Securities; Exceptions)
Section 13(a) – Changes in Investment Policy (Prohibited Actions for Registered Investment Companies)
Section 15(a) – Investment Advisory and Underwriting Contracts (Written Contract to Serve or Act as Investment Adviser; Contents)
Section 16(a) – Changes in Board of Directors; Provisions Relative to Strict Trusts (Election of Directors)
Section 17(a) – Transactions of Certain Affiliated Persons and Underwriters (Prohibited Transactions)
Section 18 – Capital Structure
Section 19 – Dividends
Section 22 – Distribution, Redemption, and Repurchase of Redeemable Securities
Section 23 – Distribution and Repurchase of Securities: Closed-end Companies
Section 30 – Periodic and Other Reports; Reports of Affiliated Persons
Section 35 – Unlawful Representations and Names
Section 36 – Breach of Fiduciary Duty
Section 37 – Larceny and Embezzlement
12b-1 – Distribution of Shares by Registered Open-end Management Investment Company Cboe Rules
1.1 – Definitions
4.5 (f) – Long-term Equity Option Series (LEAPS®)
4.6 – Adjustments
6.20 (e) – Exercise of American-style Index Options
6.21 – Allocation of Exercise Notices
8.1 – Just and Equitable Principles of Trade
8.3 – Position Limits
8.31 – Position Limits for Broad-based Index Options
8.32 – Position Limits for Industry Index Options
8.41– Position Limits — Interest Rate Options
8.42 (b) – Exercise Limits — Index Options
8.42 (f) – Exercise Limits — Interest Rate Options
11.1 – Exercise of Option Contracts
MSRB Rules
D-12 – Definition of Municipal Fund Securities
G-13 – Quotations Related to Municipal Securities
G-17 – Conduct of Municipal Securities Activities
G-30 – Prices and Commissions
G-45 – Reporting of Information on Municipal Fund Securities
Real Estate Investment Trusts (REITs)
REIT Modernization Act of 1999
Internal Revenue Code
301 – Distributions of Property
316 – Dividend Defined
856 – Definition of Real Estate Investment Trust
858 – Dividends Paid by Real Estate Investment Trust After Close of Tax Year
1035 – Certain exchanges of Insurance Policies
1091 – Loss from Wash Sales of Stock or Securities
1233 – Gains and Losses from Short Sales
1256 – Contracts Marked to Market
3.3 Provides appropriate disclosures regarding investment products and their characteristics, risks, services and expenses
Knowledge of:
 Required disclosures on specific transactions (e.g., material aspects of investments, statement of additional information, material events, control relationships)
 Types of investment risk (e.g., call, systematic and nonsystematic, reinvestment, timing)
 Types of investment returns (e.g., tax-exempt interest, return of capital)
 Costs and fees associated with investments (e.g., markups, commissions, net transactions, share classes, non-discretionary fee-based accounts, surrender charges, 12b-1 fees, mortality and expense charges in variable products, soft dollar arrangements)
 Tax considerations (e.g., unification of gift and estate taxes, lifetime exclusion, annual gift limit, taxation of securities received as a gift, inheritance of securities)
 Market analysis considerations (e.g., market sentiment, market indexes, options volatility, put/call ratio, market momentum, available funds, trading volume, short interest, index futures)
 Market analysis considerations for municipal securities, including Bond Buyer indexes (e.g., 11 GO Bonds Index, Municipal Bond Index (40 Bond), 20 GO Bonds Index)
 Technical analysis of basic chart patterns and key terms (e.g., trend lines, saucer/inverted saucer, headand-shoulders/inverted head-and-shoulders, breakouts, resistance/support levels, moving averages, consolidation, stabilization, overbought and oversold)
 Disclosure of material events effecting retail sales of municipal bonds
2165 – Financial Exploitation of Specified Adults
SEC Rules and Regulations
Securities Exchange Act of 1934
Section 28(e) – Effect on Existing Law (Exchange, Broker, and Dealer Commissions; Brokerage and Research Services)
Internal Revenue Code
2503 – Taxable Gifts
3.4 Communicates with customers about account information, processes requests and retains documentation
Knowledge of:
 Customer confirmations and statements, including: components, timing, mailings to third parties, and exceptions
 Account value, profits and losses, realized and unrealized
 Withdrawals and tenders
 Customer account records (e.g., updating for change of address, sending required notifications, investment objectives)
 Transferring accounts between broker-dealers (e.g., Automated Customer Account Transfer Service (ACATS), transfer agent and procedures)
 Books and records retention requirements
 Account closure procedures
409T – Statements of Accounts to Customers
2231 – Customer Account Statements
2232 – Customer Confirmations
2273 – Educational Communication Related to Recruitment Practices and Account Transfers
4510 – Books and Records Requirements
11870 – Customer Account Transfer Contracts
SEC Rules and Regulations
Securities Exchange Act of 1934
10b-10 – Confirmation of Transactions
15g-6 – Account Statements for Penny Stock Customers
17a-4 – Records To Be Preserved by Certain Exchange Members, Brokers and Dealers
Regulation FD – Disclosure Requirements
Cboe Rules
6.1 – Reporting duties
7.1 – Maintenance, Retention and Furnishing of Books, Records and Other Information
7.2 – Reports of Uncovered Short Positions
7.3 – Financial Reports
7.4 – Audits
7.5 – Automated Submission of Trading Data
7.7 – Risk Analysis of Market-maker Accounts
7.8 – Risk Analysis of Portfolio Margin Accounts
7.9 – Regulatory Cooperation
9.5 – Confirmation to Customers
9.6 – Statements of Accounts to Customers
9.14 – Transfer of Accounts
MSRB Rules
G-8 – Books and Records To Be Made by Brokers, Dealers, and Municipal Securities Dealers and Municipal Advisors
G-9 – Preservation of Records
G-15 – Confirmation, Clearance, Settlement and Other Uniform Practice Requirements with Respect to Transactions with Customers
G-26 – Customer Account Transfers
Function 4: Obtains and Verifies Customers Purchase and Sales Instructions and Agreements; Processes, Completes and Confirms Transactions
4.1 Provides current quotes
Knowledge of:
 Orders, offerings and transactions in customer accounts (e.g., at advertised yield)
 Trade execution activities
 Types of securities quotes (e.g., firm, subject)
 Types of orders (e.g., all-or-none (AON), fill-or-kill (FOK), immediate-or-cancel (IOC), not-held, market-onclose (MOC), spread, straddle)
 Short sale requirements and strategies (e.g., order marking, locate, borrow and delivery, speculation, hedging, arbitrage)
 Securities lending (e.g., hard to borrow, fail to deliver)
 Best execution obligations
4320 – Short Sale Delivery Requirements
4551 – Requirements for Alternative Trading Systems to Record and Transmit Order and Execution Information for Security Futures
5210 – Publication of Transactions and Quotations
5220 – Offers and Stated Prices
5260 – Prohibition on Transactions, Publication of Quotations, or Publication of Indications of Interest During Trading Halts
5290 – Order Entry and Execution Practices
5310 – Best Execution and Interpositioning
6100 Series – Quoting and Trading in NMS stocks
6110 – Trading Otherwise than on an Exchange
6120 – Trading Halts
6121 – Trading Halts Due to Extraordinary Market Volatility
6130 – Transactions Related to Initial Public Offerings
6400 Series – Quoting and Trading in OTC Equity Securities
6500 Series – OTC Bulletin Board® Service
6600 Series – OTC Reporting Facility
11860 – COD Orders
SEC Rules and Regulations
Securities Exchange Act of 1934
15c2-7 – Identification of Quotations
15c2-11 – Initiation or Resumption of Quotations Without Specified Information
15g-3 – Broker or Dealer Disclosure of Quotations and Other Information Relating to the Penny Stock Market
15g-4 – Disclosure of Compensation to Brokers or Dealers
Regulation ATS – Alternative Trading Systems
Regulation SHO – Regulation of Short Sales
Cboe Rules
5.33 – Certain Types of Orders Defined
5.7 – Required Order Information
NYSE Rules
7.12 – Trading Halts Due to Extraordinary Market Volatility
7.31 – Orders and Modifiers
7.35 Series – Auctions
7.37 – Order Execution and Routing
54 – Dealings on the Floor-persons
64 -- Bonds, Rights and 100-Share-Unit Stocks
71 – Precedence of Highest Bid and Lowest Offer
72(d) – Priority of Cross Transactions and Supplemental Material .10 – Definition of a Block
74 – Publicity of Bids and Offers
75 – Disputes as to Bids and Offers
76 – “Crossing” Orders
77 – Prohibited Dealings and Activities
80B – Trading Halts Due to Extraordinary Market Volatility
104 – Dealings and Responsibilities of DMMs
123A – Miscellaneous Requirements
123D(d) – Initial Listing Regulatory Halt
127 – Block Crosses Outside of the Prevailing NYSE Quotation
1000 – Automatic Executions
1001 – Execution of Automatically Executing Orders
1002 – Availability of Automatic Execution Feature
1004 – Election of Buy Minus Zero Plus Orders
4.2 Processes and confirms customers transactions pursuant to regulatory requirements and informs customers of delivery obligations and settlement procedures
Knowledge of:
 Information required on an order ticket (e.g., symbol, account number, price)
 Market making activities: role and functions of the designated market maker, listing requirements, limitations on trading during significant market declines, principal transactions, agency transactions, quotations (e.g., firm, subject or otherwise qualified, bid wanted, offer wanted, size obligations), SEC order handling rules, transaction reporting
 Use of automated execution systems
 Regulatory reporting requirements (e.g., Order Audit Trail System (OATS), Trade Reporting and Compliance Engine (TRACE), Electronic Municipal Market Access (EMMA), trade reporting facility (TRF), Real-Time Transaction Reporting System (RTRS))
 Delivery requirements
 Good delivery (e.g., certificates in possession of the seller, certificates in the name of two persons, deceased owner, stock or bond powers, mutilated certificates, due bills, DVP/RVP, book entry securities, stock certificate, endorsements, denominations, bearer, registrar, registered, Direct Registration System (DRS))
 Settlement of transactions (e.g., security-specific requirements, when-, as- and if-issued, ex-rights, exdividends, due bill checks, negotiated settlements, option exercise/assignment, dont know (DK), extensions)
5330 – Adjustment of Orders
6000 Series – Quotation, Order, and Transaction Reporting Facilities
6140 – Other Trading Practices
6700 Series – Trade Reporting and Compliance Engine
7000 Series – Clearing, Transactions and Order Data Requirements, and Facility Charges
11000 Series – Uniform Practice Code
SEC Rules and Regulations
Securities Exchange Act of 1934
15c6-1 – Settlement Cycle
Cboe Rules
6.20 – Exercise of Options Contracts
6.21 – Allocation of Exercise Notices
6.22 – Delivery and Payment
MSRB Rules
G-12 – Uniform Practice
G-14 – Reports of Sales or Purchases
Nasdaq Stock Market Rules
4600 Series – Requirements for Nasdaq Market Makers and Other Nasdaq Market Center Participants
4750 Series – Nasdaq Market Center-Execution Services
NYSE Rules
63 – “When Issued”— “When Distributed”
130 Series – Comparison and Exchange of Contracts
133 – Comparison—Non-cleared Transactions
135 – Differences and Omissions—Cleared Transactions (“DKs”)
136 – Comparison—Transactions Excluded from a Clearance
4.3 Informs the appropriate supervisor and assists in the resolution of discrepancies, disputes, errors and complaints
Knowledge of:
 Erroneous reports, errors, cancels and rebills
 Requirements for addressing customer complaints and consequences of improper handling of complaints
 Methods of formal resolution (e.g., arbitration, mediation, litigation)
 Form U4 reporting requirements
4513 – Records of Written Customer Complaints
4530 – Reporting Requirements
8000 Series – Investigations and Sanctions
11892 – Clearly Erroneous Transactions in Exchange-listed Securities
11893 – Clearly Erroneous Transactions in OTC Equity Securities
12000 Series – Code of Arbitration Procedure for Customer Disputes
13000 Series – Code of Arbitration Procedure for Industry Disputes
14000 Series – Code of Mediation Procedure
Cboe Rules
5.11 – Price Binding Despite Erroneous Report
9.17 – Customer Complaints
4.4 Addresses margin issues
Knowledge of:
 Requirements and characteristics of margin accounts (e.g., minimums, approvals, ineligible accounts, eligible/ineligible securities), and required disclosures (e.g., interest rate disclosure and hypothecation)
 Product or strategy specific requirements (e.g., Treasury securities, mutual funds)
 Calculations in margin accounts (e.g., long and/or short positions)
 Initial margin: long market value, short market value, debit balance, credit balance, initial Regulation T margin requirement on long or short positions, Regulation T requirement for established accounts, loan value, excess equity, buying power of deposited securities
 Maintenance: additional purchases, sales (long or short), cash withdrawals, stock withdrawals, simultaneous purchases and sales, restrictions, liquidation to meet a margin/maintenance call, deposit of cash or securities required to meet a margin or maintenance call
 Special memorandum account (SMA): balance, buying power, prohibited use of SMA, effect of excess equity, deposit of marginable securities, receipt of cash dividends and earned interest, liquidation of securities in the account, cash or securities withdrawals, new margin securities purchased or sold short
 Other margin accounts (e.g., portfolio margin, day trading)
2264 – Margin Disclosure Statement
4210 – Margin Requirements
Cboe Rules
10.1 – General Rules
10.2 – Time Margin Must Be Obtained
10.3 – Margin Requirements
10.4 – Portfolio Margin
10.5 – Determination of Value for Margin Purposes
10.6 – "When Issued" and "When Distributed" Securities
10.7 – Guaranteed Accounts
10.8 – Meeting Margin Calls by Liquidation Prohibited
10.9 – Margin Required Is Minimum
10.10 – Compliance with Margin Requirements of New York Stock Exchange
10.11 – Daily Margin Record
Federal Reserve
Regulation T – Credit by Brokers and Dealers

General Securities Representative Series 7
Business-Tests Representative reality
Killexams : Business-Tests Representative reality - BingNews Search results Killexams : Business-Tests Representative reality - BingNews Killexams : CT manufacturers embrace virtual reality to recruit and train employees, test new products

From large-scale producers to small machine shops, Connecticut manufacturers are increasingly turning to virtual reality technology as a way to recruit and train employees while also testing products before they hit production.

The state has more than 100,000 open jobs, and workforce issues have plagued almost all industries since the COVID-19 pandemic hit in March 2020. As businesses compete for talent, some are turning to virtual reality programs — either internally or through third-party partners — to recruit or train young people.

The technology, along with augmented reality programs that share similar traits, gives potential employees a taste of what an aerospace or manufacturing job could look like without sacrificing the time and effort of visiting a factory or moving equipment to a school or training facility, experts said.

Some companies, like Stratford’s Sikorsky Aircraft, even use virtual reality to test product designs before they’re put into production.

“We’ve got to go where the people are, and you can’t bring a six-axis machine into a classroom,” said Paul Lavoie, the state’s chief manufacturing officer.

Lavoie said using virtual reality technology is another example of how companies can reach potential workers and give them a taste of what a job looks like.

Recruitment tool

The Northwest Regional Workforce Investment Board, which offers job training and other youth programs, held an event earlier this month at the American Mural Project in Winsted to discuss how it would use more than $2 million recently awarded through the federal Good Jobs Challenge. The program is aimed at attracting talent to the state’s manufacturing and healthcare sectors and upskilling and reskilling existing workers.

The three-dimensional American Mural Project exhibit, which highlights U.S. workers across many industries, was a fitting backdrop for the networking event during which the group’s Executive Director Cathy Awwad showcased five new virtual reality headsets the workforce group is using for recruitment and education purposes.

“We’ve landed on these VR goggles as a means of promoting career awareness,” Awwad said. “You can try it on, you can touch it, you can virtually feel what the work looks like, what the machinery looks like and what your day would look like.”

Awwad said the board signed a $16,000 contract with virtual reality company Transfr to use their technology. The plan, she said, is to bring the goggles to trade and high schools so students can virtually experience working at an aerospace manufacturer, construction company or hospital.

“I had them on and I was fueling an aircraft. Another guy had them on and he was changing oil on a car — it’s really interesting stuff,” Awwad said.


Genny Fonseca, director of strategic planning for the Northwest Regional Workforce Investment Board, tests out a game-based job simulation on a virtual reality headset.

Some VR goggles are outfitted with career-readiness programming, while others have full-fledged training modules for prospective employees.

“It will allow students to see the different career pathways open to them,” Awwad said.

She said the Northwest Regional Workforce Investment Board is hoping to partner with other employment training organizations and employers that might want to use the goggles in their own curriculum.

Further, Awwad said the board plans to hold monthly virtual reality days where companies and the general public can try the goggles.

“We’re planning to take them to job fairs and career fairs and then use them within our own youth programs,” Awwad said.

Training option

East Hartford-based VRSim Inc. touts expertise in virtual reality going back more than 20 years. The company makes virtual reality training programs and hardware solutions that help train employees in specific industries.

Maggie Volz, VRSim’s marketing coordinator, said one of the company’s early markets was welding through a partnership with Lincoln Electric. Since then the company has continued to expand into other industries and has a popular painting and coating virtual reality training program called SimSpray. The technology is used across fields like automotive, aerospace, building trades, furniture and cabinetry, she said.

“Our focus really is to pull together and offer training tools that give students the ability to practice and Boost their techniques without the costs and risks associated with raw materials,” Volz said. “We want to give them a chance to hone their skills without any risk involved.”

Schools and companies also use VRSim’s products to showcase different career paths and upskill and train workers, she said.

Manufacturing and trades-related industries aren’t VRSim’s only focus. The company announced in April it was piloting a certified nursing assistant virtual reality simulator.

Volz said VR technology has become more prevalent in recent years because the pandemic exacerbated workforce development challenges.

‘Build before you build’

At Sikorsky in Stratford, the helicopter manufacturer has been undergoing what it calls a “digital integration and transition” of its product life cycles for years.

Sikorsky Vice President of Enterprise Business Transformation Mike Ambrose said that process essentially means connecting data related to everything from an idea based on what customers need to the manufacturing and creation of a product. He said the company has invested more than $1 billion in digital technologies at its factories in the last six years to allow computer programs, machines, and employees to better share data about what they’re working on.

That’s where virtual reality comes in.

“If you think about seeing people with goggles playing tennis or golf, we have a version of that, which is much more sophisticated and integrated that essentially takes a representation of an aircraft,” Ambrose said.

Sikorsky has a large area dedicated to its virtual reality space, but the technology is also portable and can be moved around.

Sikorsky uses it to allow workers, engineers and customers to look at product designs so they can offer feedback. Ambrose gave the example of using a virtual helicopter model to ensure a soldier of any height can adequately reach components and other parts in the aircraft.

Virtual reality technology allows Sikorsky to confront potential issues in product design much earlier in the development process, resulting in significant time savings, he said.

As a result, aircraft performance and build that the company previously saw in its 100th aircraft, is now seen in its 20th.

“Virtual reality is all stuff we do before we build aircraft, before we design aircraft,” Ambrose said. “We find (issues) before we even finish the design.”

Sun, 25 Sep 2022 12:00:00 -0500 en text/html
Killexams : The 4-Day Workweek Could Soon Become a Reality

Last June, more than 70 companies in the signed up for the six-month experiment of a four-day week.

The idea was to test what would happen if they gave employees one paid day off a week.

Halfway through the trial, 88% of the companies report that the four-day week is working 'well' for their . Moreover, 46% say their business has "maintained around the same level," while 34% report that it has "improved slightly."

"The four-day week trial so far has been extremely successful for us," said Claire Daniels, CEO at Trio Media, one of the companies involved in the trial. "Productivity has remained high, with an increase in wellness for the team, along with our business performing 44% better financially."

What is the 4-Day Work Week Experiment?

The 4-day work week pilot program is a six-month trial of a four-day working week, with no loss in pay for employees. The initiative was created by a non-profit 4 Day Week Global organization in partnership with researchers at Cambridge University, Boston College, and Oxford University.

Currently, there are pilot programs in the UK, US, Ireland, Australia, and . 4-Day Work Week Global launches new programs every quarter in different regions.

Founded in New Zealand by architect Andrew Barnes and entrepreneur Charlotte Lockhart, 4-Day Week Global is dedicated to "supporting the idea of the 4-day week as a part of the future of work," according to their website. Lockhart says she is passionate about showing "the benefits of a productivity-focused and reduced-hour workplace."

More results from the 4-Day Workweek Pilot Program

More than 3,300 employees are getting a paid day off weekly as part of the 4-day workweek experiment in the UK.

The companies range from small enterprises to large corporations, spanning , workplace consultancy, leadership, and personal development.

Participants were asked to take a survey. Thirty-five of the 41 companies responded that they were "likely" or "extremely likely" to consider continuing the four-day workweek. Six companies reported that productivity had significantly improved.

According to an article in The New York Times, some companies said the four-day week had given employees more time to exercise, take up hobbies, cook, and spend time with their families.

Nicci Russell, the Managing Director of Waterwise, admitted the pilot wasn't easy at first. "We have all had to work at it—some weeks are easier than others," he said. "But it's been great for our wellbeing, and we're definitely more productive already."

Thu, 22 Sep 2022 17:22:00 -0500 Jonathan Small en text/html
Killexams : Are in­cen­tives nec­es­sary to achieve tri­al di­ver­si­ty? Two re­searchers say yes

An $8 billion exit from Eli Lilly and a short-lived stint heading up oncology work at the Big Pharma post-Loxo sale have persuaded Josh Bilenker to be hush-hush about his new venture, which ever-so-slightly broke cover last year and remains almost 100% under wraps, save for investor names.

Bilenker, who was a life sciences VC investor prior to Loxo and before that, a medical officer at the FDA, is working on a 130-employee startup with co-founder Jeffrey Engelman, the former head of oncology at Novartis Institutes for BioMedical Research. The CEO and CSO duo put out word Monday morning that KKR led an expansion to its existing pool of backers for Treeline Biosciences, which they claim is focused on the “outer edge of scientific possibility.”

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Mon, 10 Oct 2022 22:48:00 -0500 en text/html
Killexams : 5 Ways to Stress-Test a Stock in a Bear Market

An old Warren Buffett saying goes, "Price is what you pay, value is what you get."

The volatile price action of the stock market can lead to fear of missing out on the upside and panic selling on the downside. But in reality, the true value of many companies is much more constant. Even a single quarterly earnings report rarely makes or breaks a company despite potentially sizable moves in the stock price.

In this bear market, there are many stocks that are down 50% or more from their all-time highs. In some cases, stock prices clearly got disconnected from true value, leading to a steep sell-off. But for many other companies, the stock price may be lower for little more than a downturn in the business cycle.

If your investment portfolio is down big and you want to stress-test a few stocks, you've come to the right place. Here are five methods you can use to make sure a company can outlast a prolonged bear market.

Image source: Getty Images.

1. Is the company reliant on debt or diluting its stock to run its business?

Companies that generate positive earnings and free cash flow can organically fund their operational and capital expenses. Most familiar industry-leading companies fall into this category. Apple (NASDAQ: AAPL) generates positive earnings and free cash flow and isn't reliant on diluting its share count or taking on debt to run its business. In fact, it tends to reduce its outstanding share count by buying back stock and therefore increasing earnings per share.

However, many less established and unprofitable companies may have impeccable growth potential. But that potential is dependent on bringing products to market and growing sales, which may not be possible without debt and/or equity financing. Debt financing is less attractive now that interest rates are rising. And declining stock prices and lower valuations make it a bad time to raise cash by diluting stock.

2. Does the company have a competitive advantage?

Large companies like Apple have brand power, pricing power, plenty of cash, and clear competitive advantages through product and service integration. However, there are many small companies that also have competitive advantages.

A good example of a company with a strong competitive advantage is Datadog (NASDAQ: DDOG), a cloud monitoring and analytics platform. The company doesn't generate consistent positive earnings. But it has been free cash flow positive for years. What's more, it has industry-leading customer retention and growth despite the difficult business climate. It also has more cash on its balance sheet than debt, giving it a nice failsafe in case growth slows.

Datadog is an excellent example of a smaller company that lacks earnings power but is still a great long-term buy for the reasons discussed.

3. Is the company well run?

When times are tough, companies with excellent management teams can limit excess spending, make key acquisitions, and emerge on the other side of a downturn with a leg up on their peers. Looking at the track record of a management team through past cycles is an excellent way to determine if the top brass is well equipped for challenges.

Chevron (NYSE: CVX) is a good example of the impact a strong management team can have on a business. For years, the company has kept a rock-solid balance sheet, which gave it the ability to sustain dividend growth throughout the COVID-19-induced oil and gas downturn. Chevron also made key acquisitions and was able to buy oil and gas reserves and invest in alternative energy when so many smaller oil and gas companies didn't have the resources to do so.

Today, the oil and gas industry is one of the few bright spots in the stock market, so it's not surprising that Chevron is doing well. However, the company's present position results from several key decisions made in past years. Chevron's prudence during the last oil and gas downturn, as well as its ability to capitalize on upside, makes it an excellent dividend stock to own over the long term.

4. Does the company deploy capital well?

A metric called return on capital employed (ROCE) takes earnings before interest and taxes (EBIT) and divides it by total assets minus current liabilities (also known as capital employed). In simple terms, this profitability metric shows how much EBIT a company can generate based on capital employed. The higher the ROCE, the better.

One of the big reasons Apple and Microsoft stocks are both still up big over the last three years and have grown to become the two largest U.S.-based companies by market cap is because of their ability to use capital effectively. Despite being large companies, Apple and Microsoft continue to find ways to expand into new markets and use capital effectively, something that many mature companies struggle with. As a result, both companies currently have higher ROCE ratios than their five-year medians.

AAPL Return on Capital Employed data by YCharts.

To further illustrate the point, notice how Apple and Microsoft have higher ROCE ratios than smaller and faster-growing companies like Advanced Micro Devices or Netflix -- a testament to their competitive advantages and effective execution.

5. Does the company have a path toward multi-decade growth?

No matter how old a company is or the industry it is in -- the company must have a path toward long-term growth. Without growth, companies can't boost dividends, make acquisitions, or achieve product penetration into new markets. Growing revenue and earnings justify rising stock prices. The opposite is true for companies that fail to sustain growth.

Keep even-keeled and make a calculated decision

A silver lining of bear markets is that investors get to see how their favorite companies hold up during a period of heightened volatility and downward selling pressure. What's more, they also get to see how management responds to challenges and how vulnerable a business is to macroeconomic and secular headwinds.

By stress-testing your holdings, an investor can see if a position is worth adding to, holding, or selling, thereby making a decision independent of the price action the market throws at you.

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Daniel Foelber has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Apple, Datadog, Microsoft, and Netflix. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.

Fri, 30 Sep 2022 01:54:00 -0500 en text/html
Killexams : Rent Going Up? One Company’s Algorithm Could Be Why.

ProPublica is a nonprofit newsroom that investigates abuses of power. Sign up to receive our biggest stories as soon as they’re published.

On a summer day last year, a group of real estate tech executives gathered at a conference hall in Nashville to boast about one of their company’s signature products: software that uses a mysterious algorithm to help landlords push the highest possible rents on tenants.

“Never before have we seen these numbers,” said Jay Parsons, a vice president of RealPage, as conventiongoers wandered by. Apartment rents had recently shot up by as much as 14.5%, he said in a video touting the company’s services. Turning to his colleague, Parsons asked: What role had the software played?

“I think it’s driving it, quite honestly,” answered Andrew Bowen, another RealPage executive. “As a property manager, very few of us would be willing to actually raise rents double digits within a single month by doing it manually.”

The celebratory remarks were more than swagger. For years, RealPage has sold software that uses data analytics to suggest daily prices for open units. Property managers across the United States have gushed about how the company’s algorithm boosts profits.

“The beauty of YieldStar is that it pushes you to go places that you wouldn’t have gone if you weren’t using it,” said Kortney Balas, director of revenue management at JVM Realty, referring to RealPage’s software in a testimonial video on the company’s website.

The nation’s largest property management firm, Greystar, foundthat even in one downturn, its buildings using YieldStar “outperformed their markets by 4.8%,” a significant premium above competitors, RealPage said inmaterials on its website. Greystar uses RealPage’s software to price tens of thousands of apartments.

RealPage became the nation’s dominant provider of such rent-setting software after federal regulators approved a controversial merger in 2017, a ProPublica investigation found, greatly expanding the company’s influence over apartment prices. The move helped the Texas-based company push the client base for its array of real estate tech services past 31,700 customers.

The impact is stark in some markets.

In one neighborhood in Seattle, ProPublica found, 70% of apartments were overseen by just 10 property managers, every single one of which used pricing software sold by RealPage.

To arrive at a recommended rent, the software deploys an algorithm — a set of mathematical rules — to analyze a trove of data RealPage gathers from clients, including private information on what nearby competitors charge.

For tenants, the system upends the practice of negotiating with apartment building staff. RealPage discourages bargaining with renters and has even recommended that landlords in some cases accept a lower occupancy rate in order to raise rents and make more money.

One of the algorithm’s developers told ProPublica that leasing agents had “too much empathy” compared to computer generated pricing.

Apartment managers can reject the software’s suggestions, but as many as 90% are adopted, according to former RealPage employees.

The software’s design and growing reach have raised questions among real estate and legal experts about whether RealPage has birthed a new kind of cartel that allows the nation’s largest landlords to indirectly coordinate pricing, potentially in violation of federal law.

Experts say RealPage and its clients invite scrutiny from antitrust enforcers for several reasons, including their use of private data on what competitors charge in rent. In particular, RealPage’s creation of work groups that meet privately and include landlords who are otherwise rivals could be a red flag of potential collusion, a former federal prosecutor said.

At a minimum, critics said, the software’s algorithm may be artificially inflating rents and stifling competition.

“Machines quickly learn the only way to win is to push prices above competitive levels,” said University of Tennessee law professor Maurice Stucke, a former prosecutor in the Justice Department’s antitrust division.

RealPage acknowledged that it feeds its clients’ internal rent data into its pricing software, giving landlords an aggregated, anonymous look at what their competitors nearby are charging.

A company representative said in an email that RealPage “uses aggregated market data from a variety of sources in a legally compliant manner.”

The company noted that landlords who use employees to manually set prices “typically” conduct phone surveys to check competitors’ rents, which the company says could result in anti-competitive behavior.

“RealPage’s revenue management solutions prioritize a property’s own internal supply/demand dynamics over external factors such as competitors’ rents,” a company statement said, “and therefore help eliminate the risk of collusion that could occur with manual pricing.”

The statement said RealPage’s software also helps prevent rents from reaching unaffordable levels because it detects drops in demand, like those that happen seasonally, and can respond to them by lowering rents.

RealPage did not make Parsons, Bowen or the company’s current CEO, Dana Jones, available for interviews. Balas and a Greystar representative declined to comment on the record about YieldStar. The National Multifamily Housing Council, an industry group, also declined to comment.

Proponents say the software is not distorting the market. RealPage’s CEO told investors five years ago that the company wouldn’t be big enough to harm competition even after the merger. The CEO of one of YieldStar’s earliest users, Ric Campo of Camden Property Trust, told ProPublica that the apartment market in his company’s home city alone is so big and diverse that “it would be hard to argue there was some kind of price fixing.”

What role RealPage’s software has played in soaring rents — which in the decade before the pandemic nearly doubled in some cities — is hard to discern. Inadequate new construction and the tight market for homebuyers have exacerbated an existing housing shortage.

But by RealPage’s own admission, its algorithm is helping drive rents higher.

“Find out how YieldStar can help you outperform the market 3% to 7%,” RealPage urges potential clients on its website.

Few tenants know that such software, owned by a privately held company, has had a hand in rent increases across the country.

In Boston, renter Kaylee Hutchinson said she was puzzled when her landlord — unbeknownst to her, a RealPage client — told her days into the first pandemic lockdowns that her rent was going up. Building staff insisted that the market rate for her apartment was 6.5% higher than she was paying, despite her protests that people were fleeing the city.

© Provided by ProPublica Kaylee Hutchinson’s landlord, who uses RealPage’s pricing software, told her rent was going up at the start of the pandemic even as many people were fleeing the city. (Philip Keith, special to ProPublica)

A few weeks later, she and her fiancé saw a newly vacant unit in their building advertised online for less. One of their landlord’s policies permitted moving to another unit owned by the company, so they did.

Hutchinson, who is an analyst for the police department, wondered if a computer algorithm was behind building staff’s inflexibility. “It was pretty obvious they should have been dropping prices,” she said. “They were digging their heels in.”

Hutchinson said she watched apartments in her building sit vacant at prices that didn’t make sense to her.

“A normal mom-and-pop landlord, they’re panic about having a good tenant and protecting their interest in the agreement,” Hutchinson said. “These companies, they’ll just replace you.”

The Origins of YieldStar

One of YieldStar’s main architects was a business executive who had personal experience with an antitrust prosecution.

A genial, self-described “numbers nerd,” Jeffrey Roper was Alaska Airlines’ director of revenue management when it and other major airlines began developing price-setting software in the 1980s.

Competing airlines began using common software to share planned routes and prices with each other before they became public. The technology helped head off price wars that would have lowered ticket prices, the Department of Justice said.

The department said the arrangement may have artificially inflated airfares, estimating the cost to consumers at more than a billion dollars between 1988 and 1992. The government eventually reached settlements or consent degrees for price fixing with eight airlines, including Alaska Airlines, all of which agreed to change how they used the technology.

At one point, federal agents removed a computer and documents from Roper’s office at the airline. He said he and other creators of the software weren’t aware of the antitrust implications. “We all got called up before the Department of Justice in the early 1980s because we were colluding,” he said. “We had no idea.”

When Roper returned to the United States in the early 2000s after a stint in central and eastern Europe, he said, he discovered the apartment rental industry was so far behind technologically that it resembled the emerging markets he’d just left.

Apartment managers were “basically pricing their product on a paper napkin,” said Roper, who eventually formed his own company.

Old computers and manual recordkeeping were mainstays of the industry. Leasing agents gauged how their buildings compared by calling up competitors. “This was just a ripe business,” with lots of money and lots of opportunities for technological improvement, Roper said.

RealPage hired Roper as its principal scientist in 2004 to Boost software it had bought from Camden Property Trust, a large investor-backed owner and manager of apartment buildings.

Roper quickly realized he required data — a lot of data — to get the algorithm working properly. He began building a “master data warehouse” that pulled in client data from other RealPage applications, such as those for leasing managers.

A proof-of-concept version of the software had performed well in tests at townhouses Camden offered for rent in its home city of Houston.

At the time, the street behind Camden’s townhouses was shut down while a grocery store was being built. Leasing staff wanted to discount rent for the townhouses because of the nuisance, said Kip Zacharias, who worked with Camden as a consultant.

Instead, YieldStar suggested boosting rents. “We were like, ‘Guys, just try it,’” Zacharias said.

The units ended up renting for significantly more than staff had expected, he said. “That was kind of the eureka moment,” Zacharias said. “If you’d listened to your gut, you would have lowered your price.”

The practice of lowering rent to fill a vacancy was a reflex for many in the apartment industry. Letting units sit empty could be costly and nerve-wracking for leasing agents.

Such agents sometimes hesitated to push rents higher. Roper said they were often peers of the people they were renting to. “We said there’s way too much empathy going on here,” he said. “This is one of the reasons we wanted to get pricing off-site.”

Unimpeded by human worries, YieldStar’s price increases sometimes led to more tenants leaving.

Camden’s turnover rates increased about 15 percentage points in 2006 after it implemented YieldStar, Campo, the company’s CEO, told a trade publication a few years later. But that wasn’t a problem for the firm: Despite having to replace more renters, its revenue grew by 7.4%.

“The net effect of driving revenue and pushing people out was $10 million in income,” Campo said. “I think that shows keeping the heads in the beds above all else is not always the best strategy.”

(Reminded of that quote, Campo told ProPublica it “sounds awful” and doesn’t reflect how he or Camden views renters today. “We fundamentally believe our customers are the most important part of our business,” he said. “We’re not about pushing people out.”)

Hiking rents at the same time benefited all landlords, the industry learned. “A rising tide lifts all boats,” one real estate executive and revenue management proponent told the industry publication Yield Pro in 2007.

One of the greatest threats to a landlord’s profit, according to Roper and other executives, was other firms setting rents too low at nearby properties. “If you have idiots undervaluing, it costs the whole system,” Roper said.

© Provided by ProPublica Jeffrey Roper helped develop YieldStar, which uses an algorithm to suggest prices for apartments across the country. (Shelby Tauber for ProPublica)

Roper wasn’t the only technologist working on an apartment pricing algorithm. Donald Davidoff, the primary developer of rival software called Lease Rent Options, or LRO, said he designed his program differently, to head off any concerns about collusion.

Instead of relying on a digital warehouse that includes competitor data, Davidoff used a complex formula and public market data to steer LRO’s algorithm. The system relied on incremental price shifts to manage demand for apartments, said Davidoff, an MIT-educated former rocket engineer. “That’s not dissimilar to changing a trajectory of a rocket through inflection of a nozzle,” he said — making small changes that can dramatically alter something’s course over time.

Davidoff said he was careful to avoid features that might run counter not only to anti-discrimination laws, such as the Fair Housing Act, but also those that bar competitors from conspiring to set prices.

“I had many conversations with attorneys to understand where the boundaries are,” he said. “Anybody who’s building one of these systems or is involved in these should care a lot about fair housing and should care a lot about price collusion to avoid both.”

Roper told ProPublica that when he was developing the YieldStar software more than a decade ago, he was concerned about avoiding both issues. He also said he didn’t want to misuse private data in pricing.

“I was highly sensitized to: You just don’t do it,” Roper said.

Despite differences in the software’s design, RealPage acquired LRO in 2017 after months of scrutiny by the antitrust division of the justice department. Federal regulators review mergers above a certain size — right now, it is transactions valued at $101 million — and typically allow them to proceed after only a preliminary review. But some are flagged for a more extensive look. The government can challenge a merger in court if it believes it could substantially harm competition.

RealPage’s purchase of LRO received such a second look, but the DOJ allowed it to proceed in late 2017. The department did not respond to requests for comment.

The approval allowed RealPage to acquire its only significant competitor, Roper said, adding, “I was surprised the DOJ let that go through.”

RealPage was pricing 1.5 million units, and the acquisition of LRO would double that, Steve Winn, RealPage’s then-CEO, said at a mid-2017 investor conference. “I don’t think there’s any concentration, enough concentration, of buying or pricing power here” to warrant DOJ concerns, he said. A third company had a substantial footprint in the market, Winn said, but property managers’ own manual pricing processes or proprietary systems were RealPage’s largest competitor.

“We expect our combined platform to drive accelerated, sustained revenue growth,” Winn said in a media release announcing the deal.

RealPage’s influence was burgeoning. That year, the firm’s target market — multifamily buildings with five or more units — made up about 19 million of the nation’s 45 million rental units. A growing share of those buildings were owned by firms backed by Wall Street investors, who were among the most eager adopters of pricing software.

RealPage renamed its combined pricing software AI Revenue Management. By the end of 2020, the firm was reporting in a Securities and Exchange Commission filing that its clients used its services and products to manage 19.7 million rental units of all types, including single-family homes. The private equity firm Thoma Bravo bought the public company a few months later for $10.2 billion.

Winn, whose net worth Forbes estimates at $1.7 billion, stepped aside. He did not respond to requests for comment.

A spokesperson for Thoma Bravo declined to comment.

Who Uses the Software and How It Works

Somewhere around 2016, according to one trade group, the industry’s use of the pricing software began to achieve “critical mass.”

The more property managers who sign on to RealPage services, the more data flows into the company’s repository. That in turn aids its pricing service, which the company says “leverages multifamily’s largest lease transaction database.”

RealPage’s clients include some of the largest property managers in the country. Many favor cities where rent has been rising rapidly, according to a ProPublica analysis of five of the country’s top 10 property managers as of 2020. All five use RealPage pricing software in at least some buildings, and together they control thousands of apartments in metro areas such as Denver, Nashville, Atlanta and Seattle, where rents for a typical two-bedroom apartment rose 30% or more between 2014 and 2019.

Greystar and FPI Management each control hundreds of buildings in metro areas where rents have risen steeply in recent years. And Equity Residential, Lincoln Property Company and Mid-America Apartment Communities each manage dozens of buildings in high-growth markets.

In contrast, these same companies control fewer buildings in metro areas such as Philadelphia, Tampa and Chicago, where rents have increased more slowly, the analysis found.

Many factors may cause RealPage clients to cluster in high rent-growth markets. The company’s clients may gravitate toward such markets because those areas will bear more rent hikes and so offer an opportunity to make more money, for instance. But RealPage says its software steers pricing that beats the market in areas where it operates.

RealPage’s algorithm calculates how demand for apartments responds to changes in price — what’s known as price elasticity.

The algorithm takes into account characteristics of apartments, like the number of bedrooms. It also considers factors such as how many more of a complex’s apartments are likely to become available in the near future. Property managers can adjust settings according to their priorities — such as how full they want their buildings to be.

The software also analyzes rent prices in the broader market, the company said. That data can provide insight into how competitors’ buildings located near the client — such as within, say, a half-mile or mile radius — are being priced, said Ryan Kimura, a former RealPage executive.

One advantage RealPage’s data warehouse had was its access to genuine lease transactions — giving it the true rents paid, instead of simply those a landlord advertised, RealPage said.

Property managers can’t look at the unpublished data any one rival is sharing with YieldStar, Roper and other former RealPage employees said.

Nicole Lott said that when the building where she worked as a property manager near Dallas started using YieldStar, the software determined that similar buildings in the area were charging more. It pushed for steep increases.

“It really jumped rates up,” Lott said. “Leasing slowed down to a crawl.”

She and other staff challenged the software, asking the division of her company that oversaw YieldStar for a review, she said. The landlord ended up raising rates more gradually, she said.

“We didn’t think we could get those rates,” she said. “In some cases we were right and in some cases we might have been wrong.”

Kimura, a former RealPage executive who worked at the firm for three years before leaving in 2021, said the company would typically see pushback from property staff on about 10%-20% of the software’s recommendations. It was part of the process. “If they are approving every rate and it’s 100% acceptance,” he said, “they basically have a blindfold on and are pushing a button.”

RealPage claims its software will increase revenue and decrease vacancies. But at times the company has appeared to urge apartment owners and managers to reduce supply while increasing price.

During an earnings call in 2017, Winn said one large property company, which managed more than 40,000 units, learned it could make more profit by operating at a lower occupancy level that “would have made management uncomfortable before,” he said.

The company had been seeking occupancy levels of 97% or 98% in markets where it was a leader, Winn said. But when it began using YieldStar, managers saw that raising rents and leaving some apartments vacant made more money.

“Initially, it was very hard for executives to accept that they could operate at 94% or 96% and achieve a higher NOI by increasing rents,” Winn said on the call, referring to net operating income. The company “began utilizing RealPage to operate at 95%, while seeing revenue increases of 3% to 4%.”

But the software’s supporters say it’s not driving the nation’s housing affordability problem.

Though soaring rent is giving the industry a “black eye,” Campo said, the culprit is a lot of demand and not enough supply — not revenue management software. The software just helps managers react to trends faster, he said.

“Would you rather do your work today on a typewriter or a computer?” he asked. “That’s what revenue management is.”

Using software like YieldStar is “taking what we used to do manually on a yellow pad and calling people on the phone and putting it on a codified system where you take the errors out of the pricing,” he said.

RealPage, Seattle and Rising Rents

To see how rent-setting software can make a difference, look no further than Seattle, where over the last few years rents have risen faster than almost anywhere in the country, some studies show.

Large apartment buildings in one ZIP code just north of downtown, sandwiched between the Space Needle and Pike Place Market, are overwhelmingly controlled by RealPage clients, ProPublica found.

The trendy Belltown neighborhood, with its live music venues and residential towers, had 9,066 market rate apartments in buildings with five or more units as of June, according to the data firm CoStar and Property management was highly concentrated: The ZIP code’s 10 biggest management firms ran 70% of units, data showed.

All 10 used RealPage’s pricing software in at least some of their buildings, according to employees, press releases and articles in trade publications.

Expensive markets with high rents, like Seattle, tend to have “very high” rates of revenue management use by landlords, Roper said.

Two buildings in the ZIP code — one with revenue management software and the other without — reveal diverging approaches to pricing apartments.

The Fountain Court apartments, 320 units clustered around a courtyard with a fountain, are about a half-mile from Amazon’s corporate headquarters. The building is owned and managed by Essex Property Trust, whose executives told investors in a 2008 earnings call that they were implementing YieldStar in the trust’s apartment buildings.

At the Fountain Court, rent has risen 42% since 2012, CoStar data shows — steeper than the 33% average increase for similar downtown buildings.

Tenant Amanda Tolep and her husband were approaching the end of their lease for a one-bedroom at the six-story building near the end of 2021 when they learned rent would jump about $400, to $1,600. The increase amounted to 33% — in one year.

Tolep had been working as a barista and launching her own nutrition-related business. Her husband worked for a bank. They expected their rent to go up, knowing they had received a “COVID deal.” But the size of the jump, along with other nuisances — like stolen packages and noise from a nearby fire station — led them to look elsewhere.

After finding prices similar to their raised rent at several other neighborhood buildings, the couple decided to leave the city and move a half-hour’s drive north.

A spokesperson for Essex declined to comment. None of the other biggest property managers commented on the record about their use of revenue management.

About six blocks away, rent has not gone up as dramatically at The Humphrey Apartments, a historic six-story brick building with 74 units.

© Provided by ProPublica John Stepan’s rent stayed relatively steady in a building that did not use RealPage’s pricing software. (Jovelle Tamayo for ProPublica)

John Stepan, a writer for a tech company, moved into a studio in the 1923 building a little more than a year ago. It was small, but he liked the high ceilings, hardwood floors and farmhouse-style kitchen. He had secured a COVID deal, too: one month free, with rent of $1,295 a month after that.

A few months before his lease was up, the building notified him that rent would increase by $50, which amounted to about a 3.9% rise. “It was surprisingly low,” said Stepan, who left only because he found a condo to buy nearby.

Tami Drougas, the asset manager who oversees The Humphrey and two other Seattle-area buildings for the local real estate developer who owns them, said she doesn’t use a revenue management system.

“I don’t believe in them,” she said. “That’s great and fine for larger corporations. But I think it takes the humanity out of what we do.”

After 24 years in the industry, she said, she sees good relationships with tenants and vendors as the key to running a building successfully. She said The Humphrey has low costs related to vacancies.

The building’s rent has barely budged in recent years, she acknowledged. “We have a lot less turnover and I feel like that keeps expenses down,” Drougas said.

Seattle has been hit particularly hard by soaring rents. One report found the city had the steepest rent growth of any major city in the nation over the decade ending in 2019. Almost 46,000 Seattle households were spending more than half their incomes on housing, making them what federal standards call “severely cost-burdened,” according to a 2021 study the city commissioned. Many families have trouble paying for necessities like food and medical care when their rent eats up 30% or more of their income.

“Many others have been priced out of Seattle altogether due to rapidly rising rents and housing prices,” the study said.

It also found that people with higher incomes often “down rented,” choosing cheaper apartments that would otherwise have been available to people making less. Seattle should have had a surplus of 9,000 apartments affordable to people making 80% or less of the median income, the study found. But tenants’ down renting as prices rose turned that surplus into a deficit of 21,000.

Newly Rent-Burdened Workers Range From Accountants to Groundskeepers

In metro Seattle, more people in a variety of jobs are spending over 30% of their income on rent. Below are the 10 occupations where the share of rent-burdened households jumped the most.

© Provided by ProPublica Note: A household’s occupation was determined by the job held by the highest earner in each household; to determine if a household is cost-burdened, gross rent (including utilities) was divided by total household income. Homeowners were not included. Source: IPUMS USA, University of Minnesota. (Graphic by Haru Coryne)

As the availability of apartments has shrunk, so has the choice of landlords. The startling concentration of property management in Belltown mirrors a national trend.

The number of apartments controlled by the country’s 50 largest property managers has grown every year for 14 years, according to the National Multifamily Housing Council, which surveys buildings with five or more units.

Those firms oversaw about 1 in 6 such apartments nationwide in 2019, amounting to 3.6 million units. By 2021, the number had risen to almost 4.2 million.

James Nelson, a former bank examiner and loan broker, noticed the concentration of landlords when he and his partner moved to Seattle in 2018.

Troubled by astronomical home sale prices and high rents, Nelson began looking at what was happening in the broader market.

After some digging, he found that many if not most of the bigger apartment managers in Seattle appeared to be using price-setting software. “The name RealPage kept popping up,” said Nelson, who is retired and writing a book on his research. “I went in and looked at the technologies that they were using.”

He concluded the landlords were using tech to do exactly what RealPage advertised it could do — help them charge high rents and beat the market.

“There is no competition,” he said.

Concerns About Competition

RealPage’s software has gained traction at a time when the Biden administration, concerned about rising prices and corporate concentration, is looking to bolster enforcement of rules meant to ensure competition is flourishing.

To win cases, antitrust prosecutors have traditionally needed to show that competitors agreed among themselves to tamper with pricing. “If competitors agreed among themselves to use the same algorithm and to share information among themselves with the purpose of stabilizing pricing, that would be per se illegal,” said Stucke, the former antitrust prosecutor.

If they simply shared information without agreeing to manipulate pricing, the question of whether antitrust law was violated would be more complex, he said. Stucke said he knew of no cases where companies had been prosecuted for what’s known as tacit collusion while using the same algorithm to set prices.

But Maureen K. Ohlhausen, who was then the acting chair of the Federal Trade Commission, said in a 2017 talk that it could be problematic if a group of competitors all used the same outside firm’s algorithm to maximize prices across a market.

She suggested substituting “a guy named Bob” everywhere the word algorithm appears.

“Is it OK for a guy named Bob to collect confidential price strategy information from all the participants in a market and then tell everybody how they should price?” she said. “If it isn’t OK for a guy named Bob to do it, then it probably isn’t OK for an algorithm to do it either.”

Through a representative, Ohlhausen declined to comment on RealPage.

RealPage’s software raises multiple concerns, experts said.

Courts have frowned on sharing nonpublic data among competitors. Lease transaction data is not always public.

As far as RealPage’s claim on its website that it uses “disciplined analytics that balance supply and demand to maximize revenue growth,” Stucke said that businesses can’t usually control supply and demand on their own. “Normally that’s left to market forces,” he said.

The RealPage User Group — the forum for apartment managers who use the company’s products — encourages rivals to work together, something that has been challenged as anti-competitive in antitrust prosecutions, too. The company’s website says the group aims to “promote communications between users,” among other things.

Starting out with 10 members in 2003, the group has grown to more than 1,000 participants, according to the website. A dozen subcommittees, including two focused on revenue management, meet in invitation-only sessions at the company’s annual conference, RealWorld, and participate in a conference call each quarter.

Those sorts of collaborations, Stucke said, “could raise an antitrust red flag.”

If clients are tampering with market forces, their assertions in RealPage marketing videos that its software keeps prices and occupancy “more stable” could also become relevant in court, Stucke said. Similar comments have been used as evidence in previous antitrust cases.

And the exhortations by RealPage and real estate executives for companies to use YieldStar and let some units sit vacant to raise prices are reminiscent of a legal case in the early 1900s, he said, where lumber companies shared information and a directive to reduce supply in order to push up prices.

In an email to ProPublica, RealPage dismissed the notion that the company was using market data improperly.

The company said that using genuine rents helps the company “capture a truer picture of price elasticity and affordability,” which reduces the odds a unit is overpriced. And the lease transaction data RealPage is using isn’t always private; sometimes such data is disclosed, the company said, such as when publicly traded real estate firms make reports.

The FTC, which has broad authority to bring enforcement cases against businesses for anti-competitive practices, said in 2021 that it was seeking a more active role in such cases.

A spokesperson for the FTC declined to comment on RealPage’s pricing software.

The agency has tangled with RealPage before: In 2018, the company agreed to pay $3 million to settle an FTC complaint that the company had failed to do enough to make sure personal information used in its tenant screening product was accurate. RealPage did not admit wrongdoing in the settlement.

Higher Rents Are Burdening More Tenants

Drama over rising rent costs — now a key driver of inflation — has been increasingly public. The year before the pandemic, roughly 46% of renters in the U.S. spent more than 30% of their income on rent and therefore met the definition of cost-burdened, Harvard University’s Joint Center for Housing Studies found.

In mid-September in Washington, D.C., angry protesters disrupted the normally sedate yearly conference held by the National Multifamily Housing Council. Before security ejected them, they seized the stage and recounted how their families had been harmed by an inability to find safe, affordable housing.

At the center of the acrimonious debate has been RealPage’s Jay Parsons.

Since RealPage’s own July conference, he’s repeated a statistic, compiled from a company data set of new lease transactions, that market-rate apartment renters are only spending around 23% of their income on rent.

“The reality is that rents can only rise as incomes rise,” Parsons told The New York Times last month. “If people can’t afford it, you can’t lease it.”

But his sunny view has drawn sharp rebukes.

This is demonstrably false,” wrote Ben Teresa, co-director of the RVA Eviction Lab at Virginia Commonwealth University, on Twitter. “One of the defining characteristics of housing markets in the last 40 years has been rents increasing faster than wages.

“The problem is quite precisely that people are paying rents they can’t afford,” he wrote.

Do You Have a Tip for ProPublica? Help Us Do Journalism.

Maya Miller contributed reporting and Doris Burke contributed research.

Fri, 14 Oct 2022 21:00:00 -0500 en-US text/html
Killexams : A pioneering clinical trial will test psychotherapy that uses virtual reality for young people with depression

Some studies have shown alarming numbers of young people suffering from symptoms of depression. "We're talking about numbers that reach up to 60%-80% of young people, including those diagnosed with mild symptoms. And the numbers have probably increased with the pandemic," explained Adrián Montesano, a researcher and member of the Faculty of Psychology and Education Sciences at the Universitat Oberta de Catalunya (UOC). "The symptoms are mild in most cases, but we know that the sooner these problems receive treatment, the less likely they are to persist in the long term or worsen," said Montesano.

A clinical trial coordinated by Montesano with the professor from the Faculty of Psychology of the UB and the Institute of Neurosciences of the UB (UBNeuro) Guillem Feixas will examine new tools to try to Boost the psychological treatment these people receive. The study will examine the usefulness of personal construct therapy in young people between 18 and 29 years old with mild or moderate symptoms of depression. It will also explore whether it is more effective when implemented in conjunction with a new and pioneering virtual reality application. The trial is being funded by the Spanish Ministry of Science and Innovation.

"Personal construct therapy focuses above all on how people construct their reality, and the meaning they give to things that happen to them and to the people around them", said Montesano. Its results in recent decades have been positive, but "this is the first trial which has been carried out applying it specifically to young people with depressive symptoms", he added. Its efficacy will be compared with that of cognitive behavioural therapy, which is considered the benchmark therapy, and is based primarily on observable behaviours.

Virtual reality applications have also been tried in exposure therapies to treat some types of phobias, but "this is the first time that they are being researched in the treatment of depression and in psychotherapy in general", confirmed Montesano. The app, called EYME, is a pioneering development by the University of Barcelona. The system uses a prior interview to transform the meanings and important people in the individual's identity into a 3D space in the form of spheres and words. According to Montesano, this means it is possible "to accompany the person on a journey through their mind, through their universe of meanings and personal values, fostering therapeutic conversation. The algorithms it uses are based on the work that has been done over two decades, and we believe that it may have added value among young people, for whom it can Boost adherence to treatment and the appeal of psychotherapy".

One of the keys to psychological therapy is the patient's involvement. Various types of psychotherapy have presented equivalent efficacy rates in overall terms, but approximately 35% of patients drop out of treatment before it is considered complete. If the clinical trial turns out to be positive, it would help broaden the range of options available. "Being able to personalize treatment based on personal preference is crucial," said Montesano.

The trial has already begun, and the first patients are already being seen at the universities involved, as well as at health centres and hospitals associated with the project. It will involve 225 patients, and recruitment will continue until early 2023. The candidates are young people between 18 and 29 years old with mild or moderate symptoms of depression, who will be offered "free therapy sessions of high scientific quality, conducted by expert professionals, as part of the study", explained Montesano. Volunteers can sign up at the project website.

"Interventions and research in psychotherapy have traditionally focused on the most severe forms, which has partially led to young people being under-represented," acknowledged Montesano. "Today we know that the sooner the problem is addressed, the better the long-term results, so the trend needs to be reversed. This is already happening in society, and it's something that must also happen in research," he concluded.

This research supports Sustainable Development Goal (SDG3, Good Health and Well-being.


The UOC's research and innovation (R&I) is helping overcome pressing challenges faced by global societies in the 21st century, by studying interactions between technology and human & social sciences with a specific focus on the network society, e-learning and e-health.

The UOC's research is conducted by over 500 researchers and 51 research groups distributed between the university's seven faculties, the E-learning Research programme, and two research centres: the Internet Interdisciplinary Institute (IN3) and the eHealth Center (eHC).

The University also cultivates online learning innovations at its eLearning Innovation Center (eLinC), as well as UOC community entrepreneurship and knowledge transfer via the Hubbik platform.

The United Nations' 2030 Agenda for Sustainable Development and open knowledge serve as strategic pillars for the UOC's teaching, research and innovation. More information: #UOC25years

Disclaimer: AAAS and EurekAlert! are not responsible for the accuracy of news releases posted to EurekAlert! by contributing institutions or for the use of any information through the EurekAlert system.

Thu, 06 Oct 2022 07:00:00 -0500 en text/html
Killexams : Will TV break us apart? Six celebrity couples put their relationships to the test in new reality show Unbreakable – and the results were surprisingly emotional...

Will TV break us apart? Six celebrity couples put their relationships to the test in new reality show Unbreakable – and the results were surprisingly emotional...

  • Unbreakable,  BBC1's new reality show, puts a variety of couples to the test
  • It includes mental and physical challenges, hosted by comedian Rob Beckett
  • The couples are a mixed bag, including Charlie Mullins and his girlfriend RaRa
  • Falklands War hero Simon Weston and his wife Lucy also feature in the show

Mr And Mrs meets I'm A Celebrity in BBC1's entertaining new reality show Unbreakable, which pitches new couples against long-married ones to see whose partnerships are the strongest.

Comedian Rob Beckett hosts the six-part competition, which puts six celebrities and their partners through a series of mental and physical challenges, and he gets to watch on as the couples bicker and make up while working together against their rivals hoping to win the first Unbreakable Couple title.

Passing judgement alongside him and examining the undercurrents of the celebrity pairings are relationship experts Anjula Mutanda and Maria McErlane, who award points for each challenge – with couples eliminated as the show progresses.

Comedian Rob Beckett hosts the six-part competition, which puts six celebrities and their partners through a series of mental and physical challenge

There are both laughter and tears as they stumble and fail, and also some surprisingly emotional moments as the couples open up about the struggles within their relationships.

'I'm obsessed with people and family and partner dynamics,' admits Rob, a married father-of-two. 'I love nothing more than leaving a party and gossiping with my wife Lou about the other couples and how they behaved, or how their kids behaved. This show is perfect for that as it puts all kinds of pressure on the different couples to see how they react. I was surprised by how competitive they all were, they all really wanted to win.

'Relationships are about teamwork. Life is hard and some days it all gets too much. That's when you need your partner to step up and look after you and take control. Then you can return the favour when they don't feel too good. Who doesn't like to see celebrities and their partners put to the test under pressure? It was an amazing experience to film and I'll never be able to unsee Denise Welch falling into a lake, Simon Weston blindfolding his wife in a maze or Shirley Ballas getting a tattoo.' 

One of the couples is Charlie Mullins, the millionaire founder of Pimlico Plumbers, and his singer girlfriend RaRa, who've been together for just 18 months

Strictly judge Shirley took up the offer of having a tribute to her actor boyfriend Danny Taylor inked on her back in one of the challenges.

The couples are certainly a mixed bag. There's a 37-year age gap between Charlie Mullins, the millionaire founder of Pimlico Plumbers, and his singer girlfriend RaRa, who've been together for just 18 months after meeting on a beach in Marbella, while Falklands War hero Simon Weston and his wife Lucy have been married for 32 years and have three children.

'Before you do something like this you think there's nothing you don't know about each other after all this time, but taking part just proved to us that even though we're individuals, we need and want to do things together,' says Simon. 'We'd never done anything like this before and it was far out of our comfort zone.'

Strictly judge Shirley took up the offer of having a tribute to her actor boyfriend Danny Taylor inked on her back in one of the challenges

The other couples are Loose Women panellist Denise Welch and artist husband Lincoln Townley, comedian Stephen Bailey and his lawyer boyfriend Rich Taylor, and Olympic BMX racer Shanaze Reade and her event organiser girlfriend Teddy Edwardes.

And from the start, it's clear it won't be an easy ride for any of them. The couples have to work together to make their way across a lake (cue some hilarious drenchings), write some beautiful words about each other and change song lyrics to reflect their relationship – then recite them before doing a bungee jump.

There's also a Big Brother element to the show, with all the couples filmed eating together, and they're surprisingly open as they ponder the meaning of relationships. 

While the physical challenges tested them, the hardest part for many of the couples was opening up about their relationships.

Falklands War hero Simon Weston and his wife Lucy have been married for 32 years and have three children

'The physical side of things was tough because we're old, but at times, especially for Lucy, things were emotional,' says Simon. 'There were courses she hadn't spoken about in public before.'

Shirley feels the same way. 'I think Danny would agree the emotional challenges were the hardest for us both – but they really showed me the importance of working through these things together and how best we could support each other.

'Those challenges really strengthened us as a couple, and that was one of the best things to come out of the show,' adds Shirley, who's been married twice before but says she'd love Danny, who's 13 years younger, to propose.

'I learnt that Danny is a lot smarter than I gave him credit for and that we work really well together as a team. I learnt a relationship constantly needs work from both sides. Appreciation and communication are the key.'

Whoever wins, for many of the couples the experience proved that they really were unbreakable. Charlie and RaRa got engaged after filming the show, while Denise Welch says it reinforced the strength of her relationship, which has been through several challenges including deciding to go sober together.

'Lincoln struggled most with his fear of heights, while I struggled with my fears of being under water and of maths,' says Denise. 'The show reinforced that we prefer to do things together and that now includes working. We've always seen ourselves as an unbreakable couple and it was nice to show that to other people because many have doubted us.'

Unbreakable, Thursday, 8pm, BBC1.

Fri, 30 Sep 2022 10:31:00 -0500 text/html
Killexams : Real-estate crisis test for China

After posting record-high trade surpluses in 2020 and last year on the back of global demand for COVID-19 pandemic-related supplies, China’s economic growth this year has been the slowest among Asia’s developing economies.

China’s economic slowdown can be attributed to multiple factors, but instead of tackling the root causes of the slowdown, Beijing has turned to the easiest approach — stimulating the real-estate sector.

After all, it was the booming real-estate industry that saved China from an economic hard landing during the 2008 financial crisis, which left many countries underwater for a decade.

Back then, China pumped 4 trillion yuan (US$562 billion at the current exchange rate) into the economy to keep it afloat. Most of the funds were funneled to the real-estate sector, directly and indirectly, regardless of the original funding objectives. The stimulus has led to a 20-year housing market boom.

China’s real-estate sector, which had its beginnings in the 1990s, is a fairly new creature compared with its counterparts in other countries.

However, in the course of its 30-year growth, the sector has evolved from a temporary and experimental tool intended to relieve the government of its burden to house public employees to a mighty economic powerhouse that made up at least 30 percent of China’s GDP at the time the pandemic hit.

However, the industry changed course soon afterward and its downturn became obvious in the second half of 2020, along with an overall economic deterioration.

Under mounting economic pressure, the Chinese government turned its magic wand to its old toolbox — the property sector — for much-needed economic vigor, waiting for the 2008 miracle to repeat itself.

However, this time around, the expectation will likely turn into a great disappointment. A widely held view among economists is that China’s property sector is financially choked by the “three red lines” policy that aims to lower developers’ debt leverage.

The industry is also paralyzed by Beijing’s “zero COVID-19” policy that aims to safeguard China’s pandemic control achievements, once the envy of the world.

Economists have suggested easing the two policies to turn the economy around.

However, idling developers make up only a small part of China’s big housing headache. Property sales have so far this year fallen more than 20 percent, worse than a 10 percent decline forecast in May and worse than the dip during the 2008 crisis.

The decline in property sales cannot be attributed to the so-called “unfinished rotten projects,” which have over the past few months triggered widespread protests by home buyers trapped by mortgage contracts for properties that have not been, and might never be, completed.

However, properties in this category account for only 5 percent of total floor area under construction, not to mention that the “rotten” phenomenon has been a hallmark of China’s property developers for at least 20 years.

Ironically, new home prices fell only 1.4 percent this year.

However, this relative stability is artificially sustained by the government’s price-fixing policy that forbids developers from cutting prices.

Clearly, a lack of home buyers, rather than stalling developments, is the real threat to the survival of China’s property sector. The recommended easing of regulations would not turn the fleeing masses into enthusiastic property buyers.

To reveal the secret behind property buyers’ reluctance, one must not ignore three fundamental phenomena in China’s housing market:

The first is buyers’ motivation. In China, real estate is regarded more as an investment tool than a necessity. Except for a brief downturn during the 2008 crisis, China’s home buyers have not seen a real price correction yet. This leaves people with the illusion that property prices have only one way to go: up. Property price appreciation, in combination with a lack of other investment avenues for ordinary people, has lured the entire population into the get-rich-quick real-estate train since the 1990s.

However, the train eventually lost momentum. The downturn started with resales. Property resale prices started to drop in 2018. By the end of last year, the value of resale properties nationwide had dropped more than 20 percent from their all-time highs. Although this alerted a few shrewd property buyers, the majority were still convinced that prices would continue to rise indefinitely, albeit at an ever-slowing rate.

However, a reversal in new property prices over the past few months struck the decisive blow that finally broke property buyers’ nerve. As real estate could no longer reward them with expected price increases, they no longer had any motivation to jump into the market.

The second phenomenon stems from the aforementioned 30-year property zeal, which resulted in an enormous amount of unsold and unoccupied properties. As people treated real estate as a wealth-churning machine, everyone wanted to own as many properties as they could. By the end of 2018, 80 percent of families in China owned one or more properties, and more than 20 percent of sold properties were left empty — defined as zero utility for at least six months. To keep up with property buyers’ insatiable appetite, developers have been dumping at least 1 billion square meters of new residential properties on to the market each year since 2013.

Currently, the estimated total floor area under construction in China is 4.5 billion square meters, which means 45 million units of 100m2 dwellings would enter the already oversaturated property market if the industry returns to full capacity — a scenario that would not help ignite buyers’ lost enthusiasm.

The two phenomena lead to the third: diminished family wealth.

People in China have seen their wealth grow rapidly over the past 30 years. However, housing affordability in China is only one-fifth to one-10th of that in the US, as measured by price-to-income ratio.

For the Chinese working class, buying a piece of property often means spending their family’s entire savings and half of their salaries on down payment and mortgage payments. Real estate has swallowed 70 percent of China’s accumulated family wealth after 30 years of wild expansion.

The Chinese government has unleashed a string of incentives, such as purchase subsidies, and punitive policies to lure people back into the property market.

However, with more people becoming unemployed in a country that lacks even the most basic social assistance, such as healthcare and childcare, those who are lucky enough to still have a job have learned that stashing away some extra money for a rainy day is much wiser than entrusting their money to real-estate developers.

The Chinese government is in a no-win situation as it tries to unravel its real-estate mess. If the government succeeds in forcing people back into the property market, the residual family wealth would be wasted by the sector, dampening the viability of the overall economy and leading to a recession.

If the attempt fails, insolvency would spread through the entire sector and beyond, leading to an economic hard landing postponed for 20 years. It is hard to tell which outcome would be worse, but neither is good for China’s economy.

Daniel Jia is founder of consulting firm DJ LLC Integral Services in Spain.

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Tue, 04 Oct 2022 12:00:00 -0500 text/html
Killexams : One-time banker who’s turning dreams of outer space into an Australian reality </head> <body id="readabilityBody" readability="27.956867196368"> <h3>Newscorp Australia are trialling new security software on our mastheads. If you receive "Potential automated action detected!" please try these steps first:</h3> <ol type="1"> <li>Temporarily disable any AdBlockers / pop-up blockers / script blockers you have enabled</li> <li>Add this site in to the allowed list for any AdBlockers / pop-up blockers / script blockers you have enabled</li> <li>Ensure your browser supports JavaScript (this can be done via accessing <a href="" target="_blank"></a> in your browser)</li> <li>Ensure you are using the latest version of your web browser</li> </ol> <p>If you need to be unblocked please e-mail us at and provide the IP address and reference number shown here along with why you require access. News Corp Australia.</p><p>Your IP address is: | Your reference number is: 0.87382f17.1666051601.3306447</p> </body> </description> <pubDate>Fri, 14 Oct 2022 19:16:00 -0500</pubDate> <dc:format>text/html</dc:format> <dc:identifier></dc:identifier> </item> <item> <title>Killexams : The Story of Sega VR: Sega's Failed Virtual Reality Headset

Video game giant Sega almost became a pioneer in the home virtual reality (VR) market.

With all of the excitement around VR and augmented reality (AR) happening today it's easy to forget the same thing almost happened nearly 30 years ago as well. Anyone who followed video games and consumer electronics in the 1990s might remember the level of buzz that was surrounding VR at the time, particularly for its potential in video gaming.

At that time Sega was a household name when it came to video games and its Sega Genesis was the top selling console. So it made sense that the company would look to break new ground in the market. And with VR installations from companies like Virtuality appearing in malls and arcades across the country, it was clear that whoever could successfully bring VR into homes would be nearly untouchable in the video game market.

In 1991 Sega began development on a home VR headset, the Virtua VR (later rebranded to simply Sega VR), with a planned release only two years later. Though the Sega VR never hit store shelves, its development is a fascinating engineering story of overcoming hardware limitations and finding novel solutions to expensive problems.

First You Get the Money, Then You Get the Power...

By today's standards the Sega Genesis barely competes with even the lowest-end cellphones in terms of computing power. But in its heyday the Genesis was considered a sports car as far as home video gaming went.

But even the powerful Genesis didn't have what it took to run VR at the level of quality and fidelity seen in the Virtuality and other machines that introduced arcade gamers to VR in the 90s. Despite some issues with weight and comfort in their headsets, these arcade machines actually delivered quite well on the promise of VR with immersive 360-degree environments and fast-paced gameplay. The only problem was these machines cost upwards of $70,000 to purchase and install (and cost much more than 25 cents to play). This was due to the sensor technology that allowed for head tracking being so expensive at the time.

Obviously, Sega's customers weren't going to be taking out a second mortgage for a VR headset so the company set its engineers to work on solutions that would deliver the same level of quality at a fraction of the price. The Sega VR had a target price of $200 – putting it right in line with any other new game console or advanced peripheral available at the time. The Sega CD, for example, retailed for $299 on its initial release. What Sega was aiming to do was usher in a paradigm shift in home video gaming, at a very friendly price point.

Before it was canceled, the Sega VR headset was introduced at the 1993 Summer Consumer Electronics Show.

The Ono-Sendai Solution

Head tracking is essential to any true VR experiences. The ability to track a wearer's head movements around a 360-degree environment is key to immersion and is what separates today's lackluster mobile phone VR experiences from high-quality headsets.

Early versions of today's most popular VR headsets, including the Oculus Rift and HTC Vive, used external cameras (or “light houses') for this purpose. The latest headsets on the market feature inside-out tracking, meaning the camera array is embedded into the headset itself so the headset can track movement and position without external sensors.

Sega's engineers knew if the Sega VR was going to be viable they needed a way to do head tracking without the expensive sensors. They found that solution through technology created by a company called Ono-Sendai.

Ono-Sendai was a small electronics company that was working on its own VR headset, believing, like Sega, that the game consoles available at the time did indeed have the horsepower to deliver in-home VR. The company had come up with a novel sensing solution that Sega would later license for the Sega VR. Mark Pesce , Ono-Sendai's founder, said that the head tracking solutions available at that time cost upwards of $50,000. Ono-Sendai's solution, by contrast, only cost $1.

According to Ono-Sendai's patent, its head tracking solution combined an azimuthal sensor, created with a magnetometer, with a photodetector system consisting of a small sphere, filled with liquid and gas, with an LED and light sensors attached. The intensity of the LED light hitting the sensor would vary depending on how the sphere was titled (letting the light pass through more or less gas and liquid) by the wearer's head movement. Using the Earth's own magnetic field, the azimuthal sensor would determine the wearer's orientation while the photodetector would determine the degree of tilt.

Sega also made some other other crucial design decisions with the Sega VR, such as deciding to put the headset's processing hardware in an external interface box in order to keep the unit's weight as low as possible.

Then Came 1993...

With the Ono-Sendai solution in place Sega was ready to go to market with its VR headset. By 1993 Sega VR had already been widely covered in video game and electronics magazines. It even graced the cover of the June 1993 issue of Popular Science.

Sega was set to have the hottest product release of the holiday season. And then...nothing.

As it turns out the Sega VR was getting some problematic reviews from test groups. Motion sickness and nausea are problems that VR systems, especially games, face to this day. And the Sega VR was no exception. Reports were coming in that the headset was making kids sick and giving them headaches. Sega was warned by research institutes that prolonged use of the Sega VR could constitute a hazardous risk.

It's not clear what actually caused these issues but it may have had something to do with the Sega VR's overall fidelity. Today's VR systems can render very high resolution graphics at very high frame rates and still have these issues. While Sega VR may have looked amazing for its time, the limitations of its hardware probably only expanded these issues.

Rather than role the dice on a potential public relations nightmare, Sega's then-CEO Tom Kalinske decided it would be better for Sega to cut its losses and not release the headset. When disappointed consumers wondered why the Sega VR had been canceled, Sega tried to save face by saying the VR had been too realistic and it was concerned that players would hurt themselves reacting to the virtual environments (not likely given what graphics looked like in 1993).

Sega did manage to port some of its VR technology into motion-sensing arcade machines around 1994, but the company never tackled the home VR market again. Today, Sega has left the console hardware market entirely and exists primarily as a software company.

Still, one has to wonder, what if Sega's VR ambitions had paid off? Would the VR bubble of the 90s have still burst? Or would be looking at a whole different landscape for VR today?

For more on the full story of the history of the Sega VR check out this YouTube video from Wrestling with Gaming, a channel that explores the history of video game hardware:

Chris Wiltz is a Senior Editor at  Design News covering emerging technologies including AI, VR/AR, blockchain, and robotics.

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