Fact Pattern 27-2

question 39

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.Under the Securities Ex?change 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.

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Definitions:

Posterior Probabilities

Probabilities that are updated on the basis of new evidence, incorporating the likelihood of observed data under given hypotheses.

Likelihood Probabilities

The probabilities that express the plausibility of different parameter values for a statistical model given the observed data.

Conditional Probabilities

The likelihood of an event occurring given that another event has already occurred, used to calculate probabilities in complex situations.

Prior Probabilities

The probabilities assigned to events or hypotheses before any relevant evidence is taken into account, in the context of Bayesian statistics.