There Are Two Principal Harm-Based Arguments Against Insider Trading

question 62

Multiple Choice

There are two principal harm-based arguments against insider trading. One is that the practice is harmful to individual investors who have no insider access. The other is that:

• A) Permitting insider trading would lead to more bankrupt companies and therefore the loss of jobs.
• B) Permitting insider trading would weaken investor confidence.
• C) Permitting insider trading would destroy the market quickly.
• D) No one should have access to insider information because it is illegal.
• E) People like Martha Stewart need to "go to jail once in a while."

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Definitions:

Upward Comparison

The act of comparing oneself to people who are better off.

Assumptive Worlds

The set of beliefs and assumptions through which an individual perceives and interacts with the world.

Automatic System

A part of the mind that operates involuntary, unconsciously, and quickly, controlling most of our behaviors and cognitive processes.

Infomercial Claims

Statements or assertions made during infomercials, often about the benefits or features of a product, which may not always be fully substantiated.