Reading Comprehension

PT148 · S2 · P3 · Q17 Insider-Trading

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Passage A Insider-trading law makes it a crime to make stock transactions, or help others make stock transactions, based on information you have ahead of the general public because of your special position within a company.

Topic

Arguments for and against insider trading in the stock market

Framework

Present Debate

Main Point

Passage A argues that insider trading helps make stock prices more accurate and benefits the market, while Passage B argues that insider trading undermines fairness and investor confidence. - The Most Valuable Sentences: - Passage A: (Fourth paragraph) - Passage B: (Second paragraph)

P1 (Passage A): Definition of Insider Trading

Explains what insider trading is—using special, non-public info to trade stocks or help others trade.

P2 (Passage A): Questioning the Logic

Questions whether using exclusive information isn’t just what markets are all about; says the job of a stockbroker is to use information that others may not have yet.

P3 (Passage A): How Markets Work Best

Claims markets work best when information spreads quickly and widely, and that allowing people with good info to act helps prices reflect reality.

17.

Which one of the following laws would conform most closely to the position articulated by the author of passage A but not that articulated by the author of passage B?

  1. a law that prohibits trading

    Trap

    2% picked this

  2. a law that permits trading

    Trap

    6% picked this

  3. a law that prohibits trading

    Trap

    1% picked this

  4. a law that legalizes selling

    Trap

    13% picked this

  5. Correct

    a law that legalizes trading

    Why this is right

    Answer E is correct.

    Skill tested: Application · how this choice captures the passage's function is the move to repeat next time.

    78% picked this

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