Question

As the CEO of a pharmaceutical company, Simone learned that the government was about to block the import of one of the company's biggest-selling drugs. She decides to sell her shares of stock before the information is made public. Since she used confidential information to make her decision, she is guilty of _____.
A. whistle blowingB. fair tradeC. insider tradingD. benchmarking

Answer 1

Answer:

The correct answer is (C)

Explanation:

Simone the CEO of a pharmaceutical company has sold company stock because of inside information. Any trade which results due to inside information is known as insider trading. Any information which is not public is known as inside information that leads to abnormal profits. Government, company owners and stock market officials are the ones who generally have such type of information.

Answer 2

The stock market is a market where shares are traded. These shares determine their value with the help of determinants like demand ,supply and other factors which result in the profits and losses for share traders.

Insider Trading

• When any person uses the inside material information to gain unfair advantage by selling , buying or trading in shares without that information being publicly available for others than it is said to be as insider trading.

• Insider trading is a punishable offence and is strictly prohibited by Securities Exchange Board Of India.

Therefore the CEO was having and inside information about government policies and she used that information for gaining undue advantage, so can be said as guilty of insider trading, OPOTION C is correct.

Learn more about Insider trading here:

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