Fact Pattern 27-2

question 29

Multiple Choice

Fact Pattern 27-2
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 27-2.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.

---

Definitions:

Fixed-Rate Mortgage

A mortgage with an interest rate that remains constant throughout the life of the loan.

Acceleration Clause

A contract provision that allows a lender to require a borrower to repay all of an outstanding loan if certain agreed upon conditions are not met.

Market Value

The price at which an asset would trade in a competitive auction setting, reflecting what a willing buyer would pay a willing seller.

Mortgage

A loan in which property or real estate is used as collateral. The borrower agrees to pay back the loan, with interest, over a set period of time.