Reno, an Engineer for Shale Corporation, Learns That the Firm

question 5

Multiple Choice

Reno, an engineer for Shale Corporation, learns that the firm will increase the dividend it pays to shareholders. Reno buys 10,000 shares of company stock. When the dividend is announced to the public and the price of the stock increases, he sells the shares for a profit. He would not be liable for insider trading if the information about the dividend was

• A)material when he sold the stock.
• B)available to the public after he bought the stock.
• C)available to the public before he bought the stock.
• D)forward-looking when he bought the stock.

---

Definitions:

Independent Variable

An independent variable is a variable that is manipulated or varied by the researcher to investigate its effect on the dependent variable in an experiment.

Dependent Variable

A variable in experimental research that is expected to change as a result of manipulations of the independent variable.

Spurious Relationship

A relationship where two variables seem to be related to each other, but in reality, their association is caused by a third variable or by chance.

Research Hypothesis

A specific, testable prediction about what you expect to happen in your study, often based on theoretical expectations or previous research.