5
QuizMultiple Choice

Consumer Protection and Financial Fraud — Quiz

Question 5 • Personal Finance

Why is insider trading illegal?

Answer
A
Removes taxes
B
Reduces returns
C
Unfair advantage
D
Increases risk

Explanation

Insider trading uses important, nonpublic information to make trades before other investors can access that information. This gives insiders an unfair advantage over the rest of the market, which is why it is illegal. The correct choice is “Unfair advantage.”

AI-written and checked against the verified answer.

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