Question

Nester, a salesperson for Olive Grove Corporation, learns that Olive Grove will increase the dividend it pays to shareholders. Nester buys 10,000 shares of Olive Grove stock. When the dividend is announced to the public and the price of the stock increases, Nester sells his shares for a profit. Nester would not be liable for insider trading if the information about the dividend was:__________.​A) material when he sold the stock.B) available to the public after he bought the stock.C) available to the public before he bought the stock.D) forward-looking when he bought the stock.

Answer 1

C) available to the public before he bought the stock

Step-by-step explanation:

Insider trading is when an agent or someone with privileged information on the future performance of stocks buys stocks based on this information with the aim of making gain.

This is an illegal activity and pepertrators can be charged for insider trading.

In this scenario Nester buys shares because he knew dividends were going to increase, and sells them to make a profit.

He will not be liable for insider trading if the information on dividend increase was available to the public before he bought the stock. Then it will not be confidential information