Which one of the following laws would conform most closely to the position articulated by the author of passage A but...

BenMingov on November 12, 2019

Hi Meredith, thanks for the question!

The difference between answer choices D and E are that E encompasses author A's view in its entirety, while D is only partially correct.

Answer choice D says a law that would conform most closely with author A's stance is the following:

"A law that legalizes selling based on inside information that a stock's price ought to be dropping but prohibits buying based on inside information that it should be rising". The first part is true of author A's view, but the second is not. Author A believes insider trading should be allowed for both buying and selling. Author B would disagree with the first part of this statement, of course, as B is strongly against insider trading.

Answer choice E states the exact position of A, insider trading is fine so long as no crime is committed to get the information. Author B does not condone insider trading in any capacity.

Hope this helps!

samlhoover on May 15, 2020

I am not sure where passage A mentions anything about gathering inside information through crime? Thank you!

Victoria on August 27, 2020

Hi @samlhoover,

Happy to help!

The author of Passage A tells us that insider-trading law makes it a crime to make stock transactions based on inside information. However, the author then outlines that they believe that trading based on information that is not available to everyone is "part of the very definition of a functioning stock market" (lines 6 to 8).

For the remainder of the passage, the author outlines why they believe that stock markets work best when all relevant information about a stock (i.e. including inside information) can be disseminated widely and quickly.

From this, we can infer that the author would support a law that legalizes trading based on inside information. However, based on lines 14 and 15 ("[stock brokering] doesn't make you a criminal; it means you've done your homework"), we can also infer that the author only supports insider trading where the information is obtained through lawful means e.g. analysis of stocks.

In this way, Passage A does not explicitly mention anything about gathering inside information through crime; however, the omission of this scenario suggests that the author does not support gathering inside information through unlawful means.

Hope this helps! Please let us know if you have any further questions.