PrepTest 148, Section 2, Question 18

OrganizationDifficulty4 of 5
Passage 3Insider trading, market information, and investor confidence
The questionFull text in your LawHub copy of PrepTest 148

Passage A Insider-trading law makes it a crime(495 more words not shown)

Passage A(282 more words not shown)

Passage B(221 more words not shown)

Passage A, unlike passage B,(6 more words not shown)

Reading the passage

A tries to make insider trading look less objectionable by comparing it with accepted conduct. People already analyze stocks and profit from knowledge others lack. They also refrain from planned trades because of inside information, without being punished. A asks why acting on inside information should be treated so differently.

What we’re looking for

For an A-unlike-B question, finding a technique in A is only half the job. It must also distinguish A's argument from B's.

Working the answers

  • A

    Connecting general claims to particular situations isn't the distinctive move here. Both authors explain market principles and apply them to insider trading. A's hypothetical sale doesn't by itself establish the requested contrast.

  • B
    Correct

    Insider trading is the controversial activity. Ordinary stock analysis and insider nontrading are the accepted practices A compares it with. B doesn't use those similarities to defend insider trading; B emphasizes the difference between skill with shared information and access to private information.

  • C

    Both describe consequences. A predicts more accurate prices; B predicts lost confidence, reduced investment, and financial harm. The consequences differ, but the technique is shared.

  • D

    Both connect insider trading to the wider stock market. A considers price accuracy, while B considers confidence and access to capital.

  • E

    Both recognize that investors want to make money. B expressly uses that motivation to explain why people would stop investing if they believed the market no longer offered that opportunity. It isn't a technique unique to A.

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