SIE practice questionmediumInsider Trading
A registered representative trades a stock based on nonpublic information about a company's upcoming merger. This action constitutes:
- AInsider trading✓ Correct answer
- BFront-running
- CBest execution
- DChurning
Explanation
Why A — Insider trading
Trading on material, nonpublic information is insider trading. Front-running is trading ahead of a client; best execution is unrelated; churning is excessive trading.
Turn it into reps
Reading one answer is not the same as being ready
Lucky the Banker is a free practice app with 1,867+ SIE questions, weak-area tracking, and timed mock exams. No credit card, no paywall.
Spot an error in this question or explanation? Tell us — we fix these fast.
Related Prohibited Activities & Ethics questions
- Which scenario best describes market manipulation?
- Which best describes 'churning' in a brokerage account?
- What is the primary regulatory concern with 'painting the tape'?
- A broker uses material, nonpublic information to trade a security. This is known as:
- A registered representative trades a stock after learning material, non-public information from a client. Which law is…
- A broker-dealer acting as principal charges a customer a 12% markup on a stock trade. Under FINRA's markup policy, this…
- A broker-dealer learns material nonpublic information about a company in a client account. Which action is REQUIRED…
- Placing trades near the close of the market specifically to influence the closing price of a security is known as: