Chapter 14, Problem 14.6.6E

To determine

Introduction: Securities Act of 1934 which was passed in 1934 for security exchange transaction in secondary market with the motive to secure the investors so that they can get financial and other important information related to securities issued in secondary market. It provides provision related to the transparency and accuracy in such issues and to prevent frauds and manipulations.An insider is the internal part of the company who can be an officer, director, entity or individual who owns more than 10% of voting shares in a public company. These insiders can do insider trading and Securities exchange act of 1934 has provided a provision on prevention of such insider trading.

To choose: The correct answer.