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Explain the "Hot News" Doctrine and Its History

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Essay

Explain the "hot news" doctrine and its history.


Definitions:

Exercise Price

The price at which the holder of an option can buy (call) or sell (put) the underlying security.

Risk-Free Rate

The theoretical rate of return on an investment with zero risk, often represented by the yield on government securities such as U.S. Treasury bills.

Face Value

This is the nominal or dollar value printed on a financial instrument, such as a bond or stock certificate, representing its value at issue.

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