is just me or what? the more i read , the more i get confused… Mr Dump, a fund manager. While changing at his local tennis club, Mr Dump overhear a man he know to be a director of one of the country’s biggest mining companies boasting to his friend of the discovery of extensive gold deposits that are shortly to be publicly announced. Should Mr Dump trade on this information? A. Yes, because to fail to do so would be to fail to act in your client’s best interests. B. yes, because to fail to do so would be to fail to act in your own best interests. C. No, because this information is inside information
haha, i know eh, i dont like ethics either. But I am pretty sure the information is considered to be material in this case as new deposits will affect the price of stock etc etc so I will say C.
the “correct” answer they provide is A. their lousy explanation is : The info is inside, but it does not related to a tender offer, it has not been procured in any way and his owe on obligation of confidentiality. His may trade on the info and should do so if it is in his client’s best interests. bunch of bullsh*t i think…
I am almost certain the answer should be C. Trading on this information would constitute two violations IMHO: a) Trading on inside material information and b) No reasonable basis, that director might just be boasting. Where did you find that A is correct?
egal Wrote: ------------------------------------------------------- > I am almost certain the answer should be C. > Trading on this information would constitute two > violations IMHO: > a) Trading on inside material information and b) > No reasonable basis, that director might just be > boasting. > > Where did you find that A is correct? i agree with u. it’s in the practice exam of 7City…highly not recommend, those answers they provided suck