Which One of the Following Is Most Apt to Be

question 31

Multiple Choice

Which one of the following is most apt to be considered insider trading?

• A)Amy overhears Mary say she is being promoted to accounts payables manager and then she purchases shares in Mary's employer.
• B)Jennifer compiles the financial statements and knows that net income for the latest quarter is significantly below analyst's forecasts but continues to hold shares of her employer's stock.
• C)Kathy is an outside auditor and has found what she believes are significant accounting irregularities in a company's financial reports but owns no shares in the firm.
• D)Lee buys stock in Winter's Wear after he overhears a conversation between the firm's president and vice-president concerning a proposed acquisition.
• E)Jeff buys shares of stock in his employer's firm through the company retirement plan on a regular monthly basis.

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Definitions:

Shareholders

People or organizations that hold stock in a corporation, granting them specific rights and an interest in how well the company does.

Ethical and Legal Harmony

The ideal state in which ethical principles and legal regulations align to guide individual and corporate behavior without conflict.

Utopian Society

An idealistic community or society possessing highly desirable or perfect qualities, especially in its social, legal, and moral aspects.

Legal System

The comprehensive structure of rules, procedures, institutions, and laws through which a society applies and enforces legal order.