PT148.S2.P3.Q14 > Analytics

Hide analysis

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.

████████ ███████ █████ ██ ███████████ ███ ████ ████ ████████ ████ ███████████████ ████ ████ ██ ███ ████ ██████████ ██ █ ███████████ █████ ███████ ███ ██████ █████ ██ █████ █████████ ██ █████ ██ ██████ ███████ █████████ ████ ██████ █████ ████ ███ ████ █████ ██ ██ ██████ ██████████ ██ █████ ████████ ██ ███ ███████ █ ██████ ██████ ████ ██ ██ ███████████ ███ ████ ███ ███ ███ ██████ █████████ ██ █████████ ████ ████ ██████ █████ █████ ████ ███████ ████ ███ █ █████████ ██ █████ ██████ ████ ████ █████████

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.

█████ ███████ ████ ████ ████ ███ ███ ████████ ███████████ █████ █ ███████ ██ ██████ ██ ██████ ██ █████████ ██ ███████ ██ █████████ █████ ██████ █████████ █ ██████████ ████████ ████████████ ██ ██████████ ███████████ █████ ███ ███████████ ██ █ █████████ ██████ ██ █████ ████ █████ ███ ████ ████████ ███████████ █████ ████████ █████████████ ███ █████████ ██ ███ ██ ████ █████ ██████ ███████ █████

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.

███████ █

███ ██ ███ █████ ██████████ ██ ███ █████ ██████ ██ █████████████ ██ █ ███████████ ███████ ███████████ ████ ██████████ ███████ █████████ ██ █████████ ██ ███ ████████████ ██ ███ ████ █████ ███████ ██ ███ ██████ ███ ████ ██ ██████ ████ ██ █████ ██ █████████ ███ ███████████ ███ ██████ ████ █████████ ██████████ ██ █ ███████████ █████ ███████ ████████ ███ ███ ████ ██████ ██ ██████ █ ████ ███████████ ███ ███████ ██ █████ ██ ██████████ █████ ███ ██████

██ ███████████████ ███████████ ████ ██████ ████ ██████████ █████████ █████ ██ ███████████ ████ █████ ██████ █████ █████ ██████ ███ █████ ████ ██████ ██ ███ ██████ ███████████ █████ ████ █████████ ████████ ██████████ ██████████ ████ ████████ ███████████ ███ ███████ ██████ ████ ██████ ███████████ ███ ████ ████████ █████ █████████ ███ ██████ ████████ █████ ██████ ██ █████████ ██ ██████████ ███ █████ ██████ ██ ████ █████ ██ ███ █████ ███████

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.

█████ ██ █████ ██████ █ ████ ██ ████████ ██████████ ███ █████ ██████████ ███████ ███ ███████ ██████ ██████ ██ ███ █████ ██████ ███████ ████ ███████ ████ ███ ████ ██████ ███ █████ █████ ██ ███████ ███████████ ██ ██ ████ ████ █████████ █████████ ███ ████ █████ ████ █████ ██ █████████ ███████ ████ █████ ████ ██████ ████ █████ ███████ ███████████ ████████ ██████████ █████ ████ ████ █████████ ██████ ██ ███ █████ ████ ████ ██ ████ ███ ██ ███████████ ███ ██ █████ ██████████ ████ ██ ██████████ █████████ ██████████████

Perspective on insider-trading · Violates principle of transparency

Trading on inside info is unfair.

Passage Style

14.

Both passages are primarily concerned ████ █████████ █████ ███ ██ ███ █████████ ██████████

Question Type

Implied

Purpose of passage

What is the primary purpose of each passage? Passage A argues that insider trading shoud be considered a good thing for the stock market. Passage B argues that insider trading is bad for the stock market. So each passage is primarily concerned with answering whether insider trading is good/bad for the stock market.

How is insider ███████ ████████

Too narrow. Even if we think Passage A and B define insider trading, the primary purpose of each passage isn’t to define insider trading. It’s to argue that insider-trading is good/bad for the stock market.

Should there be ███████ █████████ ███ ███████ ████████

Neither passage discusses whether insider trading should or should not be punished more severely. They focus on the effects of insider trading on the stock market.

Why do investors ██████ ██ ███████ ████████

Too narrow. Even if we think the passages might touch on why people engage in insider trading, the primary purpose isn’t to explore those motivations. It’s to argue that insider-trading is good/bad for the stock market.

Is insider trading ███████ ██ ███ █████ ███████

This best captures the primary purpose of each passage. Passage A argues that insider trading is not harmful to the stock market. Passage B argues that insider trading is harmful to the stock market.

94%

What is the ████ █████ ██ ██████████ ███████ ████████

Neither passage discusses the best way to regulate insider trading.

PrepTest 148 - Section 2 - Passage 3 - Question 14

Difficulty

Analysis

Answer Popularity

Question history

Answer five questions and we'll estimate your score.

Confirm action