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Corporate officers and directors commonly buy and sell, for [#permalink]
25 Jun 2006, 07:14
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Corporate officers and directors commonly buy and sell, for their own portfolios, stock in their own corporations. Generally, when the ratio of such inside sales to inside purchases falls below 2 to 1 for a given stock, a rise in stock prices is imminent. In recent days, while the price of MEGA Corporation stock has been falling, the corporationâ€™s officers and directors have bought up to nine times as much of it as they have sold.
The facts above best support which of the following predictions?
(A) The imbalance between inside purchases and inside sales of MEGA stock will grow even further.
(B) Inside purchases of MEGA stock are about to cease abruptly.
(C) The price of MEGA stock will soon begin to go up.
(D) The price of MEGA stock will continue to drop, but less rapidly.
(E) The majority of MEGA stock will soon be owned by MEGAâ€™s own officers and directors.
A - This is pure speculation we don't know whether the executives will continue to buy more stocks
B - Again pure speculation. Nothing is mentioned in the passage about sale being stopped.
D - Contradictory to what is stated in the passage
E - Speculation
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