Jennifer received a tip from a close friend who is an executive manager of a publicly traded company called MegaRed Inc.The manager received some inside information about how to trade MegaRed stock to get a huge profit.He shared this information with his Jennifer.This scenario is an example of

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This scenario is an example of information asymmetry. Information asymmetry happens when managers, executives, and board members have access to private information concerning important company developments that outsiders, especially investors, are not privy to. Although possessing insider information is not illegal and indeed is part of an executive's job, what is illegal is acting upon it through trading stocks or passing on the information to others who might do so.

Jennifer Received a Tip from a Close Friend Who Is