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# Corporate officers and directors commonly buy and sell, for

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Manager
Joined: 15 May 2006
Posts: 109

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Location: Louvain, Belgium

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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.

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Senior Manager
Joined: 16 Apr 2006
Posts: 270

Kudos [?]: 240 [0], given: 2

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25 Jun 2006, 07:18
Not sure but will go for D.

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Director
Joined: 16 Aug 2005
Posts: 937

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Location: France

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25 Jun 2006, 07:21
Straight C
_________________

I believe its yogurt!

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Manager
Joined: 15 May 2006
Posts: 109

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Location: Louvain, Belgium

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25 Jun 2006, 07:22
i got C too

want to compare the reason too

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SVP
Joined: 30 Mar 2006
Posts: 1728

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27 Jun 2006, 01:37
Got C too,

No other option makes sense.

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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Director
Joined: 26 Sep 2005
Posts: 567

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Location: Munich,Germany

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10 Jul 2006, 09:15
C. can we have the OA for this please.

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Manager
Joined: 22 May 2006
Posts: 176

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10 Jul 2006, 10:21
Yup. I like C.

We can only infer C or D.

D says the opposite of whats stated in the passage.

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VP
Joined: 02 Jun 2006
Posts: 1257

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10 Jul 2006, 10:48
Answer: (C) The price of MEGA stock will soon begin to go up.

If anyone has read about insiders dumping stock, this would seem unlikely, but hey... this is GMAT not reality!!

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Manager
Joined: 11 Jan 2006
Posts: 230

Kudos [?]: 18 [0], given: 18

Location: Arkansas, US
WE 1: 2.5 yrs in manufacturing

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10 Jul 2006, 22:48
Straight C, even if u dont understand the concept of ratios only the option C has been discussed in the argument

Kudos [?]: 18 [0], given: 18

10 Jul 2006, 22:48
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# Corporate officers and directors commonly buy and sell, for

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