Legalizing Insider Trading May Have Some Advantages If Managers of a Company

Multiple Choice

Legalizing insider trading may have some advantages if managers of a company could freely trade its stock. For instance, corporate accounting scandals would be detected sooner if:

A) people from outside the firm had information about the accounting fraud before the managers would.
B) managers had a strong incentive to report the fraud to the government rather than to trade the stock.
C) speculation allowed the accounting fraud to continue for a longer period before being discovered.
D) managers who knew the true performance of the company had an incentive to trade the stock, tipping the world off that something was afoot.