Question

Which examples accurately illustrate insider trading?

A) The manager's wife shares the information with her brother, who buys shares before the public announcement.
B) The manager's wife shares the information with her brother, who sells shares before the public announcement.
C) The manager personally trades shares based on the nonpublic information.
D) Both A and C are accurate examples of insider trading.

Answer 1

Insider trading refers to the illegal practice of trading stocks or securities based on non-public material information. The accurate examples are when the manager's wife shares the information with her brother who buys shares before the public announcement, and when the manager personally trades shares based on nonpublic information.

Step-by-step explanation:

Insider trading refers to the illegal practice of trading stocks or securities based on non-public material information. It involves using information that is not available to the general public to gain an unfair advantage in the stock market. The accurate examples of insider trading are A) The manager's wife shares the information with her brother, who buys shares before the public announcement, and C) The manager personally trades shares based on the nonpublic information. In both cases, individuals with access to privileged information are using it for their personal financial gain.