You Are on the Subway in New York When You

question 52

Multiple Choice

You are on the subway in New York when you overhear two people you do not know talking about an upcoming merger, news not yet public. They seem to know their stuff. If you buy stock based on this information, and profit when the information turns out true, you have:

• A) profited, but are an outsider and so your actions are probably not illegal
• B) engaged in insider trading that is probably illegal
• C) not engaged in insider trading because you are not a corporate officer
• D) not engaged in insider trading because once you overheard the information it was public
• E) violated the Insider Trading Sanctions Act and could face criminal charges

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Definitions:

Microsystem

The immediate environment in which an individual operates, such as family and school, which directly influences their development.

Ethological Approach

A perspective in psychology that studies human behavior by comparing it to animal behavior and considering its adaptiveness and evolutionary origins.

Evolutionary Psychology

Application of Darwinian principles of natural selection and survival of the fittest to individual behavior.

Cognitive Approach

A psychological perspective that focuses on how people think, understand, and know about the world, emphasizing mental functions such as learning, memory, perception, and problem-solving.