Which of the Following Represents the General Duty Under Rule

question 56

Multiple Choice

Which of the following represents the general duty under Rule 10b-5 in regard to the duty of a company to reveal corporate developments?

• A) A company has no general duty under Rule 10b-5 to reveal corporate developments unless the company or its insiders (1)trade in securities,or (2)recommend trading to someone else.
• B) A company has no general duty under Rule 10b-5 to reveal corporate developments unless the company or its insiders (1)trade in securities,(2)recommend trading to someone else,or (3)disclose the information as a tip while withholding it from the general public.
• C) A company has a general duty under Rule 10b-5 to reveal corporate developments that are material.
• D) A company had a general duty under Rule 10b-5 to reveal corporate developments if it appears (1)that developments are material,and (2)that the material developments will have a negative effect on the company's financial reports.

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Definitions:

Negative Reinforcement

The process of strengthening a behavior by removing or avoiding a negative outcome or stimulus.

Positive Punishment

A method of behavior modification that involves the addition of an unfavorable outcome or stimulus following an undesirable behavior to decrease its occurrence.

Negative Punishment

A behavior modification technique where a favorable stimulus is removed after a certain behavior, decreasing the likelihood of that behavior occurring in the future.

Positive Reinforcement

A behavioral concept where a desirable stimulus is introduced following a behavior, increasing the likelihood that the behavior will occur again.