JWI530 Week 1 | Financial Markets in Economics - Strayer university

Question 8You are the CEO of an organization, and you’re having a private, non-business dinner with a shareholder (who is not an employee but someone you have known since high school) one week before your company is expected to release its prior year financial results. In meeting with your CFO, you know there is a significant surprise profit shortfall coming from the Latin American organization. This shareholder says, "My kid is going off to college this fall, and things are really tight around my house since I just started my own business. I am so thankful your stock has been doing well. If it rises just a few more dollars in price, I am going to cash out so I can send her to school. Think we will see a boost in price after next week's earnings release?" Which of the following is the best response?

Answers:

A. Tell your friend you are very sorry, but you are not allowed to comment on pending financial results. B. Since this is only an individual investor and not an employee, it is acceptable to share this information, provided the person promises not to act on it or share it with anyone else. C. Being very careful not to disclose any specifics or details, tell the person to consider selling some shares now. D. Stop the conversation immediately and contact the authorities to report a breach of insider trading laws by your friend for asking you the question.