Question

Tara works as a programmer for XYZ Electronics Company. About one month ago, Tara bought 500 shares of a small start-up firm with great technology because she heard rumors from the CFO's secretary that XYZ was planning to purchase the smaller company and give it an infusion of cash. Yesterday, XYZ announced the decision to buy the small firm, which significantly increased the small company's stock price. Tara most likely performed her trade based upon___________.A. public informationB. XYZ's treasury stockC. faulty informationD. insider trading information

Answer 1

D) insider trading information

Step-by-step explanation:

Insider information is defined as private facts (non-public information) about a public corporation that are used by investors in order to gain advantage. Insider trading is illegal since 1934 (made illegal by the Securities and Exchange Act) since it provides unfair advantage to those investors who have the insider information over those investors who don't.