Linda,a Manager and a Currency Trader for United Traders,has Specific

question 49

Multiple Choice

Linda,a manager and a currency trader for United Traders,has specific instructions from the CEO not to take a position on any currency in excess of $1 million.Linda sees what she believes to be a sure thing and takes a $20 million position.Unfortunately,the transaction goes bad and costs United $60 million.Does Linda have any liability to United?

• A)Yes,because Linda violated specific instructions and is,therefore,liable for the company's loss.
• B)No,Linda's actions are a normal market practice.
• C)Yes,because Linda engaged in insider trading.
• D)No,Linda is protected by the business judgment rule.

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Definitions:

Belief Perseverance

Belief perseverance is the tendency to maintain a belief even after the evidence supporting it has been debunked or contradicted.

Cognitive Dissonance

A psychological phenomenon where an individual experiences mental discomfort from holding contradictory beliefs, attitudes, or values.

Self-Blame

The act of attributing personal failures or mistakes to one's own deficiencies or actions.

Post-Trauma Coping

The methods and strategies individuals use to deal with and recover from traumatic events.