Which One of the Following Statements Related to Insider Trading

question 41

Multiple Choice

Which one of the following statements related to insider trading is correct?

• A)Licensed stockbrokers are exempt from insider trading laws.
• B)Individuals, such as Martha Stewart, who have been convicted of crimes, can be barred from being executive officers of publicly traded companies.
• C)Because of the increased speed of information flows and the improved efficiency of the markets, insider trading laws were abolished in 2006.
• D)Martha Stewart was convicted of insider trading and subjected both to a fine and a jail sentence.
• E)An investor who receives advice from an investment advisor is automatically charged with insider trading when the advisor bases his recommendations on private information.

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Definitions:

Continuity

The concept that certain processes or developments occur in a smooth, uninterrupted manner over time.

Proximity

Nearness in space, time, or relationship.

Similarity

The state of being alike or sharing common features, used in various contexts to describe resemblance or equivalence between entities.

Closure

The psychological need to seek resolution and a sense of completeness or finality in our perceptions and relationships.