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

question 48

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. 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.

Identify and organize concepts according to levels of organization.

Recognize the use of consistent principles in classification.

Distinguish between essential and non-essential attributes for classification.

Apply rules of classification to various examples.

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Definitions:

Gross Margin Ratio

A financial metric that shows the percentage of revenue that exceeds the cost of goods sold, indicating the efficiency of a company in managing its production costs.