Multiple Choice
Caroline is riding the elevator when she overhears two men talking about a proposed merger.It seems that Strawberry Corporation is going to acquire all the stock of Maple Co.Caroline asks the two men what they are talking about,and they say that when this news becomes public,Maple Co.'s stock will increase dramatically in price.They tell Caroline that this is private information and that she is not to tell anyone.Caroline buys some Maple Co.stock.Several months later,after the merger is announced,Caroline sells her stock for a large profit.Assuming all the information Caroline had was material,nonpublic information,which of the following best describes Caroline's situation?
A) Caroline has violated no law,because she is not an insider.
B) Caroline has violated no law,because she did not know the men she overheard.
C) Caroline has violated no law,because she had already heard the main points of the information before asking about it.
D) Caroline has probably violated the 1934 Securities and Exchange Act.
E) Caroline has probably violated the 1933 Securities Act.
Correct Answer:
Verified
Correct Answer:
Verified
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