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.

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Definitions:

Isotonic

A solution that has the same osmotic pressure as the fluids in a cell or body, resulting in no net movement of water across cell membranes.

Selectively Permeable

A property of cellular membranes that allows certain molecules or ions to pass through it by means of active or passive transport, while preventing others.

Osmosis

The passive movement of water molecules through a semi-permeable membrane from an area of low solute concentration to an area of high solute concentration.

Simple Diffusion

A process whereby molecules move from an area of higher concentration to one of lower concentration without the need for energy input.