The Result in United States V

question 5

Multiple Choice

The result in United States v.Bhagat indicates that an employee who wants to buy or sell stock in his or her employer's firm on the basis of not-yet-public information should

• A)act a reasonable time after the information is made public.
• B)act quickly before the information is made public.
• C)ask a third party to act on the employee's behalf.
• D)never act on the information.

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Definitions:

Cash Ratio

A liquidity ratio that measures a company's ability to pay off its short-term liabilities with its cash and cash equivalents.

Average Collection Period

The average number of days it takes for a business to receive payment from its customers for invoices issued.

Total Asset Turnover

A financial ratio that measures the efficiency of a company's use of its assets in generating sales revenue; calculated by dividing sales by total assets.

Fixed-Asset Turnover

A financial ratio that measures a company's efficiency in using its fixed assets to generate sales, indicating how well assets are being managed.