Which of the Following Is a Reason Congress Passed the Private

question 14

Multiple Choice

Which of the following is a reason Congress passed the Private Securities Litigation Reform Act of 1995?

• A)To provide protection to accredited investors who trade on insider information.
• B)To provide protection to insiders who trade on forecasts of earnings.
• C)To provide protection to companies who issue forecasts of earnings.
• D)To provide stronger penalties against companies who issue forecasts of earnings that turn out to be wrong.
• E)To provide stronger penalties against insiders who trade on forecasts of earnings.

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Definitions:

Dividend

A portion of a company's earnings distributed to its shareholders, usually in the form of cash or stock.

Directors

Individuals elected by shareholders to oversee the management and govern the affairs of an organization, making strategic decisions and ensuring legal compliance.

Decision

The act or process of making choices or judgements based on available data, reasoning, and preferences.

Retained Earnings

The amount of net income left over for the business after it has paid out dividends to its shareholders.