Which One of the Following Statements Is Correct

question 4

Multiple Choice

Which one of the following statements is correct?

• A) Company insiders are not permitted to trade their employer's securities.
• B) Only tippers can be accused of illegal insider trading.
• C) Tippees are permitted to trade securities based on information they know is private.
• D) Trading on private information which you just happen to overhear is legal.
• E) Any trading based on information known to be private is illegal.

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Definitions:

Cash Flow Per Share

The cash flow from operations divided by the number of common shares outstanding.

Statement Of Cash Flows

A summary of the cash receipts and cash payments for a specific period of time, such as a month or a year.

Bonds Payable

Long-term liabilities representing borrowed funds that a company is obligated to repay to bondholders at a specified maturity date.

Financing Activities

Transactions related to raising capital and repaying investors, including issuing equity, debt, and paying dividends.