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# Corporate officers and directors commonly buy and sell, for

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Manager
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15 Aug 2012, 00:19
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35% (medium)

Question Stats:

68% (02:31) correct 32% (01:57) wrong based on 399 sessions

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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 corporation’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 MEGA’s own officers and directors.
[Reveal] Spoiler: OA

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Director
Status: Final Countdown
Joined: 17 Mar 2010
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15 Aug 2012, 03:55
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 corporation’s officers and directors have bought up to nine times as much of it as they have sold.

Inside trading (sell and purchase) will bring the ratio between 2 to 1 hence the stock rate to improve/grow;nine times purchase will enhance the price of stocks

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.
No,it is mentioned that the sell -purchase will rise the stock prices-incorrect
(B) Inside purchases of MEGA stock are about to cease abruptly.
its is not mentioned anywhere-incorrect
(C) The price of MEGA stock will soon begin to go up.correct
(D) The price of MEGA stock will continue to drop, but less rapidly.incorrect
(E) The majority of MEGA stock will soon be owned by MEGA’s own officers and directors.
out of scope, no where mentioned that the officers/directors will own the majority of shares-incorrect
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15 Aug 2012, 18:46
This one is no more than 500 level..........
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15 Aug 2012, 23:20
C is the answer. Very easy and direct....
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Manager
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25 Mar 2015, 10:35
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Stock goes up when sales/purchase < 2.

Sales/Purchase = 1/9

Henceforth , Stocks will see increasing trend in future.

PUNEETSCHDV wrote:
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 corporation’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 MEGA’s own officers and directors.

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Manager
Joined: 17 Sep 2015
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24 Apr 2016, 11:37
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Well for the inside selling question we cant pre think in a mathematical way.

Lets say the Price goes up when the ratio of Sales to Purchase is less than 2:1

S/P < 2/1 the price goes up

Now the situations says :- P=9S

Substituting in the main statement :- S/9S = 1/9 i.e.<2/1 hence the price is bound to go up.

I hope my prethinking is correct.

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Re: Corporate officers and directors commonly buy and sell, for   [#permalink] 24 Apr 2016, 11:37
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