Dhani,an Accountant for Eureka,Inc

question 36

Multiple Choice

Dhani,an accountant for Eureka,Inc.,learns of undisclosed com-pany plan-s to market a new laptop.Dhani buys 1,000 shares of Eureka stock.He re-veals the company plans to Fay,who buys 500 shares.Fay tells Geoff,who tells Hu.Both Geoff and Hu buy 100 shares.They know that Fay got her informa-tion from Dhani.When Eureka publicly an-nounces its new laptop,Dhani,Fay,Geoff,and Hu sell their stock for a profit.
-Refer to Fact Pattern 26-3.Under the Securities Ex-change Act of 1934,Fay is most likely

• A)liable for insider trading.
• B)not liable because Fay did not prevent others from profiting.
• C)not liable because Fay did not solicit information from Dhani.
• D)not liable because Fay does not work for Eureka.

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Definitions:

Self-Esteem

Self-Esteem is a person's overall sense of their value or worth, or how much they appreciate, respect, and feel confident about themselves.

Private Ballot

A voting method that ensures the voter's choices are secret, safeguarding the privacy of the voter's decisions.

Informational Social Influence

A psychological phenomenon where individuals conform to the attitudes, behaviors, or beliefs of a group under the assumption that the group possesses more knowledge about the situation.

Normative Social Influence

The effect others have on an individual, causing them to adapt their behaviors to gain acceptance and approval.