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[Presidential Profits] Aurelia Was President of a Publicly Traded Tractor

Question 45

Multiple Choice

[Presidential Profits] Aurelia was president of a publicly traded tractor company, Tough Tractors. Aurelia became aware that stock in her company would likely increase significantly in value because her company had a contract to purchase the assets of Rough Tractors. The boards of both companies wanted the information kept confidential until the purchase was complete and a news release was made. Before the news was made public, Aurelia immediately purchased a significant number of shares in Tough Tractors. Aurelia also told her friend Johan about the contract to purchase assets although she told him to keep it quiet because it had not been made public yet. Nevertheless, unable to keep a secret, Johan told his brother, Charlie. Johan and Charlie purchased a number of shares of stock in Tough Tractors prior to any public announcement of the sale. After the public announcement was made and the purchase of assets went through, Aurelia, Charlie, and Johan all sold their shares in Tough Tractors and made a nice profit.
-By purchasing the shares after she found out about the merger, in which of the following prohibited practices, if any, was Aurelia engaged?


A) Insider trading
B) Outlaw trading
C) Presidential trading
D) Officer profiting
E) She did not engage in any prohibited practices because as president, she had the legal right to profit from the upcoming sale.

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