Question

Karen learns from a coworker at her pharmaceutical company that one of the firm's most profitable drugs will be pulled off the market. Before the news becomes public, she sells all of her stock in the company. This action is best described as:________.A. Martha Stewart syndrome.

B. Insider trading.
C. The stakeholders dilemma.
D. Conflict of interest.

Answer 1

Answer: This action is best described as INSIDER TRADING.

Explanation: Insider trading in finance can be defined as the illegal buying or selling of securities of a publicly held company by a person who has privileged access to information concerning the company's financial condition or plans.

Karen having privileged access to information that one of the firm's most profitable drugs will be pulled off the market was able to act on it. This is actually an illegal act.

Answer 2

B. Insider trading

Step-by-step explanation:

Insider trading -

It refers to the practice of selling or buying the stocks of the company by any non - public person , is referred to as insider trading .

The practice can be legal as well as illegal , depending on the process of trading .

The process is illegal when the information is non - public , and is legal when the information is public .

Hence , from the given scenario of the question ,

The correct answer is B. Insider trading .