Fact Pattern 31-3 Dhani, an Accountant for Eureka, Inc., Learns of Undisclosed Company

question 27

Multiple Choice

Fact Pattern 31-3
Dhani, an accountant for Eureka, Inc., learns of undisclosed company plans to market a new laptop. Dhani buys 1,000 shares of Eureka stock. He reveals 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 information from Dhani. When Eureka publicly announces its new laptop, Dhani, Fay, Geoff, and Hu sell their stock for a profit.
-Refer to Fact Pattern 31-3. Under the Securities Exchange Act of 1934, Geoff is most likely

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

Understand the mechanics and purposes of futures contracts, including their use in hedging and speculation.

Describe the process of marking to market and its significance in futures trading.

Identify the types of assets and commodities that can be hedged using futures contracts.

Explain the concept of arbitrage and how it applies to futures markets.

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Definitions:

Expectancy

In the context of motivation, expectancy is the belief that one's effort will lead to attainment of desired performance goals.

Instrumentality

The perception that a specific behavior will lead to a particular outcome.

Corporate Ladder

A metaphorical depiction of a hierarchy within a corporation, where individuals can ascend through promotions and career advancement.

Instrumentality

The perception of a relationship between performance and the attainment of desired outcomes or rewards.