Sehun (1986) Finds That the Practice of Monitoring Insider Trade

question 40

Multiple Choice

Sehun (1986) finds that the practice of monitoring insider trade disclosures, and trading on that information, would be

• A) extremely profitable for long-term traders.
• B) extremely profitable for short-term traders.
• C) marginally profitable for long-term traders.
• D) marginally profitable for short-term traders.
• E) not sufficiently profitable to cover trading costs.

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Definitions:

Expense Account

An expense account refers to a ledger account that tracks money spent or costs incurred in a business's operational activities.

Retained Earnings

The portion of net income that is not distributed to shareholders as dividends but is retained by the company to be reinvested in its core business or to pay debt.

Business Expansion

The process of increasing the scale or scope of a company's operations, often through new ventures, acquisitions, or increased market share.

Retained Earnings

The portion of a company's profits that are kept or retained and not paid out as dividends to shareholders.