Fact Pattern 21-3 (Questions 23-26 Apply)

question 26

Multiple Choice

Fact Pattern 21-3 (Questions 23-26 apply)
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 21-3. If Dhani is liable under the Securities Ex?change Act of 1934, it will be because the infor?mation on which he based his purchase of Eureka stock was

• A) a forward-looking forecast.
• B) not material.
• C) not yet public.
• D) not yet true.

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Definitions:

Digestive Tract

The series of organs through which food passes, nutrients are absorbed, and waste is expelled; also known as the gastrointestinal tract.

Muscularis Layer

A layer of muscle found in various organs, including the stomach and intestines, which aids in movement and function.

Smooth Muscle Fibers

The individual muscle cells or fibers that make up smooth muscle, characterized by their spindle shape and lack of striations.

Circular Smooth Muscle

Smooth muscle fibers arranged in circular bands in various organs, such as the intestines, aiding in the constriction and movement of content.