Merle,the CEO of a Corporation Owning a Number of Pet

question 52

Multiple Choice

Merle,the CEO of a corporation owning a number of pet stores,calls you for advice.Merle shares inside information that the stock of the company is going to go down because of reports that a number of dogs sold by the store had become ill and that Merle,therefore,immediately sold all personal stock in the company before the information became public.Then Merle tells you that counsel has warned of pending charges of securities violation involving Merle's insider trading.Which of the following is true regarding Merle's situation?

• A) Corporate executives may be fined but may not be sent to jail.
• B) Corporate executives may be sent to jail,but only for offenses endangering others.
• C) Corporate executives may be sent to jail,but only for fraud involving banks.
• D) Corporate executives may be sent to jail for violation of criminal laws.

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Definitions:

45-Degree Line

In economics, often used in Keynesian cross diagrams to show points where aggregate output (or income) equals aggregate expenditure, indicating equilibrium.

Gini Coefficient

A measure of the inequality of a distribution, often used to measure income inequality, ranging from 0 (perfect equality) to 1 (perfect inequality).

Lorenz Curve

A graphical representation of the distribution of income or wealth within a society, showing the proportion of total income earned by any given percentage of the population.

45-Degree Line

A reference in economics and finance, depicting a scenario where the value of goods and services produced is equal to the total demanded.