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 information
B. XYZ's treasury stock
C. faulty information
D. insider trading information

Answer 1

The correct answer is D

Step-by-step explanation:

Insider trading is the trading which involves the stock of public company or the other kind of securities like stock options or bonds grounded on the material non- public information regarding the company.

In this case, Tara purchase shares of the company grounded on the rumors heard form the XYZ. So, she is performing the trade grounded upon the information of insider trading.