Asked by Rebecca Groen on May 16, 2024
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Insider trading is prohibited because trading on the basis of inside information can give the trader an unfair advantage over the investing public.
Insider Trading
The purchase or sale of securities on the basis of information that has not been made available to the public.
Inside Information
Confidential information about a company that has not been made public and could influence the market value of its stocks or securities if known.
Unfair Advantage
An advantage gained by a party through dishonest or unethical means, leading to an imbalance in competitive situations.
- Understand the concept of insider trading and its legal implications.
Verified Answer
Learning Objectives
- Understand the concept of insider trading and its legal implications.
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