15.
In their attitudes toward stock trades based on inside information, the author of passage A and the author of passage B, respectively, may be most accurately described as
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
(5) of the general public because of your special position
within a company.
However, trading based on information you have
that everyone else doesn't-isn't this part of the very
definition of a functioning stock market? The entire
(10) field of stock brokering is based on people gaining
knowledge that others don't have and then using it to
profit themselves or their clients. If you analyze a
stock, decide that it is overvalued, and sell it, you are
taking advantage of knowledge that many others don't
(15) have. That doesn't make you a criminal; it means
you've done your homework.
Stock markets work best when all the relevant
information about a company is spread as widely as
possible, as quickly as possible. Stock prices represent
(20) a constantly shifting amalgamation of everyone's
information about and evaluations of a company's
value. It helps when those who have accurate
information about changing circumstances are
permitted to act so that stock prices reflect them.
(25) Someone selling a stock because they know
something will happen soon that will lower the stock's
value helps spread the knowledge that the price ought
to be dropping. Such actions help ensure that stock
prices do reflect a more accurate assessment of all
(30) the relevant facts. That's good for everyone in the
stock market.
When contemplating insider-trading law, it helps
to consider a far more widespread practice: "insider
nontrading"-stock sales or purchases that would have
(35) been made, but aren't because of inside knowledge.
This is certainly happening every day, and rightfully
so. No one would think to lock someone up for it.
Passage B
One of the basic principles of the stock market
(40) is transparency. In a transparent market, information
that influences trading decisions is available to all
participants at the same time. Success in the market
can then be gained only by skill in analyzing the
information and making good investing decisions.
(45) In a transparent stock market, everyone has the same
chance of making a good investment, and success is
based on individual merit and skill.
In insider-trading situations, some people make
investment decisions based on information that other
(50) people don't have. People who don't have access to
the inside information can't make similarly informed
investment decisions. That unfairly compromises the
market: people with inside information can make
informed trade decisions far before everyone else,
(55) making it difficult or impossible for other people to
earn money in the stock market.
This, in tum, causes a loss of investor confidence
and could ultimately destroy the market. People invest
in the stock market because they believe they can
(60) make money. The whole point of capital investments
is to make good investing decisions and make money
over time. If investors believe they can't make money,
they won't invest. Undermining investor confidence
would thus deny companies access to the funds they
(65) need to grow and be successful, and it could ultimately
lead to widespread financial repercussions.