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Which action is an example of insider trading?

A.
short selling stock in response to a rumor
B.
short selling stock in response to an internal memo
C.
employees selling stock according to a regular monthly plan
D.
employees selling stock in response to rising stock prices

2 Answers

4 votes

Answer:

B

Step-by-step explanation:

Short selling stock in response to an internal memo is an example of inside trading

User Maantje
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4 votes

Answer:

The correct answer is B, Short Selling stock in response to an internal memo.

Step-by-step explanation:

Insider Trading is the short selling of stocks of a company when an information is received from the internal resources of the company which is not available for the general public. Short selling is the trading strategy which assumes a decline in a stock price, due to which a person sells his stocks. So insider trading is the short selling of stocks in response to an internal memo. When a person gets information from inside the company about the future prospects of the company, and this information is not publicly available, this is called insider trading.

User Yohan D
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