Question.2551 - Efficient markets are defined as those in which security prices reflect all available information. Some investors have more information than others (legally and illegally), which may be due to the amount of research they do and time they spend. In other cases, investors may have nonpublic information; for example, an executive may have inside information. How can someone with inside information disrupt efficient markets? What measures can/should be taken to stop these disruptions? In responding to your peers, respectfully agree or disagree with the measures they have proposed and explain your reasoning.
Answer Below:
Insider xxxxxxxxxxx plays x very xxxxxxxxx role xx disrupting xxx efficient xxxxxx structure xx it xxxxx with xxxxxx and xxxxxxx based xx the xxxxxxxx non- xxxxxx information xxxxxxx trading xxxxx with xxxxxxxx non- xxxxxx information xxxxx has x direct xxxxxx on xxx market x very xxx people xxxx access xx the xxxxxxx information xxx if xxxx trade xx the xxxxxx based xx this xxxxxxxxxxx the xxxxx investors xxxxxxxx the xxxxxx to xx unfair xxx investor xxxxxxxxxx gets xxxxxx because xx this xxxxxxxx created xx the xxxxxx Since xxx market xx rigged xxx retail xxxxxxxxx withdraw xxxxx participation xxx investors xxxx non- xxxxxx material xxxxxxxxxxx fail xx receive xxx fair xxxxx of xxxxx securities xxx entire xxxxxx trades xx the xxxxxxxxxx that xxxxxxxxx has xxxxx access xx information xxxxx an xxxxxxxxx prerequisite xxx a xxxxxxxxxxx So xxxxxxx on xxx basis xxxxxxxx non- xxxxxx information xxxxx is xxxxxxxxx to xxx people xxxxxxxx the xxxxxx market xxxxx are xxxxxxx measures xxxxx can xx taken xx stop xxx disruption xxxxxx due xx insider xxxxxxx Firstly xxxxxxxx the xxxxxxxxx is xx important xxxxxxx The xxxxxxxxx should xx provided xxxxxx training xx that xxxx can xxxxxxxx any xxxx of xxxxxxxxxx behavior xxxxx takes xxxxx around xxxx and xxxxxxxxxxx report xx their xx team xxxxxxxx a xxxxxx hunting xxxx should xxxx be xxxxxx There xx a xxxxxxxx team xxxxxxxxxx for xxxx task xxxxx rather xxxx reacting xxxxx the xxxxxxxx of xxxxxx trading xxx taken xxxxx they xxxx for xxxxxxx signals xx prevent xxxxxxxxxx from xxxxxx place xxx right xxx of xxxxxxxxxx with xxx right xxxxxxxx can xxxx ensure xxx reduction xx insider xxxxxxx to x greater xxxxxx Therefore xx can xxxxxxxx that xxxx right xxx of xxxxxxxxxx and xxxxxxxx we xxx curb xxxxxxx trading xx a xxxxxxxxxxx level xxxxxxxxxxxxxxxxx V xxxxxxxxx THE xxxxxxx ARGUMENTS xxxxxxx INSIDER xxxxxxx Dameanusabun xxxxxxxx com xxxxxxxxx October xxxx http xxxxxxxxxxxx blogspot xxx analyzing-ethical-arguments-against xxxxMore Articles From Finance
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