WorksheetsInsider Trading
Total questions: 10
Worksheet time: 6mins
Name
Class
Date
1.
Who is considered an insider?
a)
A 10% stockholder
b)
An employee who has obtained material non-public information
c)
A third party that has received a tip from an insider
d)
All the above
2.
What is the maximum civil penalty for insider trading?
a)
Disgorgement of any profit made or loss avoided
b)
Disgorgement of any profit made or loss avoided plus twice this amount
c)
Disgorgement of any profit made or loss avoided plus three times this amount
d)
Disgorgement of any profit made or loss avoided plus ten times this amount
3.
What is a blackout period?
a)
A period when your company's stock price is lower than the exercise price of your options
b)
A period during which your company prohibits you from buying or selling its stock
c)
A period during which a company prohibits its insiders from exercising their stock options or receiving restricted stock
d)
A period of time after excessive drinking
4.
What arrangement can be made to provide an affirmative defense against charges of insider trading?
a)
A Section 83(b) election
b)
A Section 16 election
c)
A Rule 10(b)5-1 trading plan
d)
A Rule 144 trading plan
5.
While sitting on a bench you overhear two executives discussing the upcoming acquisition of another public company at a significant premium. May you purchase shares of the company to be acquired before the announcement is made?
a)
Yes
b)
No
6.
Which members of a company are subject to special SEC filings for their stock sales?
a)
All employees
b)
The CEO and CFO
c)
The board
d)
Executives, directors, and large-block shareholders
7.
Tom obtains information about a new product at his company. Excited about the news, he tells his friend Jerry before the news is made public. Jerry proceeds to buy a significant amount of Tom's company stock. Who can be penalized for insider trading?
a)
Only Tom (Tipper)
b)
Only Jerry (Tippe)
c)
Both Tom and Jerry
d)
Neither Tom or Jerry
8.
Which of the following is NOT a defense to insider trading?
a)
The trade was pursuant to a 10(b)5-1 trading plan
b)
The trade led to minimal profits
c)
The material information was public
d)
The non-public information was immaterial
9.
Directors and officers must pre-clear all trades in the Company’s stock at all times
a)
True
b)
False
10.
Which of the following is NOT an example of inside information?
a)
A material change in anticipated earnings
b)
A change in management
c)
The loss of significant customers, suppliers, or partners
d)
All the above are examples of inside information
100 %
