Insider Trading Is

question 45

Multiple Choice

Insider trading is:

• A)prohibited by the Securities Act of 1933.
• B)prohibited by the Securities Exchange Act of 1934.
• C)impossible in today's efficient markets.
• D)highly discouraged,but still legal.
• E)prohibited by the Sarbanes-Oxley Act of 2002.

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Definitions:

Return On Total Assets

A measure of a company's profitability relative to its total assets, indicating how effectively it uses its assets to generate earnings.

Return On Common Stockholders' Equity

A financial ratio that measures the amount of net income returned as a percentage of shareholders' equity, indicating the profitability of a company from the shareholders' perspective.

Accounts Receivable Turnover

A financial metric that measures how efficiently a company collects cash from its credit sales by calculating the number of times average accounts receivable are collected during a period.

Inventory Turnover

A measure of how many times a company's inventory is sold and replaced over a period.