Which action most directly constitutes insider trading?
Correct answer: A. Buying shares using confidential price-sensitive information
- A. Buying shares using confidential price-sensitive information
- B. Buying shares after reading a published annual report
- C. Selling shares during a publicly announced market decline
- D. Purchasing shares through a registered stockbroker
Explanation
Insider trading involves trading securities while possessing material, non-public information. Public reports and ordinary broker transactions do not by themselves make a trade insider trading.
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About Business Ethics and Corporate Governance
Business ethics applies principles such as honesty, fairness, responsibility and transparency to decisions involving employees, customers, investors, competitors and society. Corporate governance covers the board of directors, accountability, disclosure, internal controls, stakeholder interests, agency conflicts, corporate social responsibility, codes of conduct and whistleblowing.
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