Why Is Insider Trading Unethical

question 7

Multiple Choice

Why is insider trading unethical?

• A)Because the buyer of shares who is acting on inside information has effectively stolen the increase in share price from the seller.
• B)Because it is unconscionable for the person with inside information to keep that information to themselves.
• C)Because the person who sells their shares to a buyer acting on inside information has not done so willingly.
• D)Because it is illegal.

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Definitions:

Stock-split Right

The entitlement of a shareholder to receive additional shares when a company decides to divide its existing shares into multiple ones to boost liquidity.