Mosaic Theory

[question removed by admin]

How does this -not- fall under the mosaic theory?

I thought if you use your own conclusions based on nonpublic nonmaterial info that you can trade on it. I believe this question requires an assumption to be made, and I do not like assuming anything on these exams.

If we are not told whether the information that was discussed was material or nonmaterial, how am I supposed to judge that their conversation contained material info, thereby NOT abiding by mosaic theory?

Material information is defined as something a reasonable investor would want to know in his/her decision making. In this case, the official’s revealing that the development was in final stages and could be out within three months is material + nonpublic. The mosaic theory only applies to piecing together nonpublic and nonmaterial information.