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Why must insiders of a corporation disclose their trading?
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This information can include financial results, business strategies, upcoming mergers or acquisitions, and other material information that can significantly impact the company's stock price. The reason insiders must disclose their trading activities is to ensure Show more…
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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 stocks based on inside information usually earn very high rates of return. Does this fact violate the efficient markets hypothesis? c. Insider trading is illegal. Why do you suppose that is?
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