When company executives buy and sell stock based on private information they obtain as part of their

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When company executives buy and sell stock based on private information they obtain as part of their jobs, they are engaged in insider trading.

a. Give an example of inside information that might be useful for buying or selling stock.

b. Those who trade shares based on inside information usually earn very high rates of return. Does this fact violate the efficient market hypothesis?

c. Insider trading is illegal. Why do you suppose that is?

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Economics

ISBN: 9781408093795

3rd Edition

Authors: Mark P. Taylor, N. Gregory Mankiw

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Question Posted: Nov 04, 2024 07:01 AM

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When company executives buy and sell stock based on private information they obtain as part of their

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Economics

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