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Chapter 29, Problem 17P
Summary Introduction

To discuss: The benefits and costs for prohibiting insider trading.

Introduction:

When a person trades on a public company’s securities or stock through access to non-public facts about the company, it is termed as insider trading.  Few examples of insider trading are as follows:

  • Information regarding upcoming merger announcement of a company,
  • Payout policy changes,
  • Updates on the earnings of the company.

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