Question

Karin, an officer for Liquified Natural Gas Corporation (LNG), buys 10,000 shares of LNG stock. One week later, LNG announces that it will merge with a competitor, Mining & Piping Company, and the price of LNG stock increases. One month later, Karin sells her shares for a profit.

Under Section 16(b) of the Securities Exchange Act of 1934, Karin would not be liable if, after buying the stock, she had waited:

a) less than fourteen days to sell it.
b) ninety days to sell it.
c) two months to sell it.
d) more than six months to sell it.

Answer 1

d) more than six months to sell it.

Step-by-step explanation:

Karin, an officer for Liquified Natural Gas Corporation (LNG), buys 10,000 shares of LNG stock. One week later, LNG announces that it will merge with a competitor, Mining & Piping Company, and the price of LNG stock increases. One month later, Karin sells her shares for a profit.

Under Section 16(b) of the Securities Exchange Act of 1934, Karin would not be liable if, after buying the stock, she had waited more than six months to sell it.