CFA Practice Question

CFA Practice Question

Jeremy Juniper is a part of the team of ZS Inc. working on a secondary offering for PD LLC. During lunch at the ZS cafeteria Jeremy gets into a discussion with a fellow team member about revenue forecasts for PD being significantly higher than expected and how that would affect the pricing of the secondary offer. Sped Rami is another employee of ZS at the same lunch table who overhears the conversation and later purchase shares of PD.
A. Sped has violated Standard II (A) Material Nonpublic Information but not Jeremy.
B. Neither Jeremy nor Sped have violated Standard II (A) Material Nonpublic Information.
C. Both Jeremy and Sped has violated Standard II (A) Material Nonpublic Information.
Explanation: Jeremy has violated the Standard as he failed to exercise care to keep the material non-public information from being disclosed to Sped, and Sped violated the Standard as he traded based on that information.

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