SIE practice questioneasySEC - Insider Trading
Which activity is an example of illegal insider trading?
- ATrading a stock based on material nonpublic information✓ Correct answer
- BAnalyzing a company's earnings report
- CBuying stock on public earnings rumors
- DReading a company’s annual report
Explanation
Why A — Trading a stock based on material nonpublic information
Insider trading is using material, nonpublic information for a trade. Public analysis, rumors, or reading public reports is legal.
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