When a person who has confidential information about a particular company purchases shares of the company's stock with the intention of selling these shares for a higher price when the information is released to the general public, then it is known as:
A) touting.
B) churning.
C) buffering.
D) insider trading.

Question

Quizplus · Accepted Answer

Insider trading involves using confidential information to make trades in the stock of a particular company. This activity is illegal as it violates securities laws and undermines the integrity of financial markets. A person who engages in insider trading can face severe penalties, including fines, imprisonment, and other legal consequences. Touting refers to the practice of promoting a stock for personal gain, while churning involves excessive trading in a client's account to generate commissions. Buffering is not a financial term and does not relate to stock trading or securities markets.

When a Person Who Has Confidential Information About a Particular