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

Calculate and understand the impact of economic profits and losses on business decisions.

Identify and calculate break-even points for businesses.

Understand the role of market entry and exit decisions in profit maximization.

Interpret scenarios to determine business revenue, costs, and profit/loss.

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Definitions:

Eisenhower Administration

Refers to the United States federal government under President Dwight D. Eisenhower from 1953 to 1961, known for its focus on infrastructure development and Cold War diplomacy.

Vietnam

A country in Southeast Asia with a rich history, known for its vibrant culture, beautiful landscapes, and the Vietnam War which took place during the mid-20th century.

Guatemala

A country in Central America, bordered by Mexico to the north and west, Belize to the northeast, Honduras to the east, El Salvador to the southeast, and the Pacific Ocean to the south.

Massive Retaliation

A military doctrine during the Cold War that emphasized the use of nuclear weapons in response to any act of aggression.