Which of the Following Is True Regarding the State of Mind

question 25

Multiple Choice

Which of the following is true regarding the state of mind needed in order to find a violation of Section 16(b) involving short-swing trading?

• A) Liability is imposed under Section 16(b)regardless of the insider's state of mind.
• B) Intent to violate the securities laws must be found in order for there to be a violation of Section 16(b).
• C) A trader must at least act without caution in order to be found liable for violating Section 16(b).
• D) A trader must at least act negligently in order to be found liable for violating Section 16(b).

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Definitions:

Indirect Price Discrimination

A pricing strategy where different prices are charged for the same product or service based on characteristics other than the customer's willingness to pay.

Direct Price Discrimination

The practice of charging different prices to different consumers for the same product or service, based directly on the willingness to pay of each customer.

Cannibalizing

In business, the reduction in sales of a product due to the introduction of a similar product by the same company.

Elastic Demand

A situation where the demand for a product or service significantly changes in response to a change in price, indicating consumers' sensitivity to price changes.