Question

Enron executives were charged with numerous counts of corporate fraud and corruption. Among the charges was insider trading, which involves the trading of a corporation's stock by insiders who may have access to information that the public does not. Which role is the government playing when it makes insider trading illegal?

A. Providing for public goods.
B. Promoting effective and workable competition.
C. Correcting for externalities.
D. Adjusting for undesirable market results.

Answer 1

B, promoting effective and workable competition

Step-by-step explanation:

Inside trading of stocks is punishable by law as it does not give room for competition since stocks are traded by individuals with access to inside information.

Making inside trading does not allow for competition as only a few people are able to jostle for the stocks which is meant to be open to the public.

Cheers.