PrepTest 148, Section 2, Question 17

Working the answers

• A

  This prohibits the informational advantage A defends. It runs toward B's concern about unequal access, so it points in the opposite direction from the requested law.

• B

  Allowing stock analysis fits both authors. Prohibiting trades based on a company position then excludes precisely the insider trading A wants to defend. This preserves the distinction A is challenging.

• C

  B is especially concerned about investor confidence and would have reason to favor this restriction. It doesn't identify a policy that fits A but conflicts with B. The effects of trading matter to both arguments; they aren't irrelevant simply because this law doesn't name the source of the information.

• D

  A uses selling an overpriced stock as an example, but never draws a rule permitting insider selling while prohibiting insider buying. The broader defense concerns informed trading, not that one-sided legal distinction.

• E
  Correct

  This permits trades based on inside information, capturing A's defense of the practice. The exception for theft doesn't undermine that fit: A's argument doesn't require permission to acquire information unlawfully. B would still object to the unequal informational advantage even when the insider obtained the information without theft.