PrepTest 148 - Section 2 - Passage 3 - Question 15

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Passage A.

Intro topic · Insider-trading law

Illegal to trade stocks based on info you get before the public because of your position in a company.

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Criticism of insider-trading law · Stock market is based on using information that others don't have

It's not illegal to study a stock and trade based on your own analysis. This is similar to trading based on inside info.

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Support for criticism · Stock prices represent assessments of company value

Support for criticism · Insider-trading helps spread info about a company

It helps make stock prices more accurate, which is good for the whole stock market.

Support for criticism · Nobody thinks "insider nontrading" should be illegal

People decide not to trade based on inside knowledge. If that's OK, insider trading should be OK, too.

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Basic principle of stock market · Transparency

All info that influences trading decisions is available to everyone at the same time. This means successful stock-trading depends only on skill.

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Perspective on insider-trading · Violates principle of transparency

Trading on inside info is unfair.

Passage Style

15.

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Question Type

Author’s attitude

Implied

Author A likes stock trades based on inside information, because she thinks it helps to make the stock market work more effectively. Author B doesn’t like stock trades based on inside information, because he thinks it “unfairly compromises the market.”

positive and neutral

Passage B’s attitude is negative, not neutral.

positive and negative

This best captures the attitudes of each author. Author A likes stock trades based on inside information, because she thinks it helps to make the stock market work more effectively. Author B doesn’t like stock trades based on inside information, because he thinks it “unfairly compromises the market.”

92%

neutral and negative

Passage A’s attitude is positive toward insider trades.

neutral and neutral

Neither passage is neutral toward insider trades.

negative and negative

Passage A is positive toward insider trades.

PrepTest 148 - Section 2 - Passage 3 - Question 15

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