Question

Rahim, an accountant for Alamo, Inc., learns of undisclosed company plans to market a new laptop. Rahim buys 1,000 shares of Alamo stock. He reveals the company plans to Tammy, who buys 500 shares. Tammy tells Jethro, who tells Hu. Both Jethro and Hank buy 100 shares. They know that Tammy got her information from Rahim. When Alamo publicly announces its new laptop, Rahim, Tammy, Jethro, and Hank sell their stock for a profit. Under the Securities Exchange Act of 1934, Tammy is most likelyâ ____

Answer 1

Answer:

The correct answer to the following question is insider trading.

Explanation:

Insider trading can be defined as a process in which an individual ( who can be company employee, officer, 10% owner of the stock etc ) , who has the access to the confidential information ( in the given case it is of company making new laptops ), buys and sells company's share on the stock exchange , within the 6 month time period and is able to earn profit. Insider trading is illegal in U.S.A , as Securities and exchange commission wants to maintain a fair market place for everyone.