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:

RRIF

Registered Retirement Income Fund, a tax-deferred retirement plan in Canada that an individual can use to generate income from the assets inside their Registered Retirement Savings Plan.

Compounded Annually

Interest calculated once a year on both the initial principal and the accumulated interest from previous periods.

Compounded Monthly

Interest on an investment or loan calculated and added to the principal balance monthly, where each month's interest calculation includes the previous month's interest.

Deferred Annuity

A financial security provided by insurers that holds back the distribution of income, either through regular installments or a one-time sum, until it's opted for by the investor.