Question: On September 2 6 , 2 0 1 8 , Louis bought 1 0 0 shares of Tesla for $ 3 1 2 . 3

On September

26, 2018,

Louis bought

100

shares of Tesla for $

312.33

per share. A few days later while watching the news, he learned that Tesla

s CEO, Elon Musk, was going to resign as Chairman of the Board of Tesla in response to charges by the Securities and Exchange Commission, although he would remain as CEO. Shares of Tesla plummeted to $

265

upon the announcement. Louis immediately sold his shares of Tesla, resulting in a loss of $

47.33

per share. Which of the following statements is correct?

Select answer from the options below

Louis

loss on the Tesla stock is not covered by SIPC insurance.

Tesla must reimburse Louis for the loss since the company

s actions caused the drop in the stock

s price.

Elon Musk must reimburse Louis for the loss since his actions caused the drop in the stock

s price.

The Securities and Exchange Commission must reimburse Louis for the loss since the charges it filed led to Musk

s resignation and the subsequent stock price drop.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Case - Low Nail Company After making some wise short-term investments at a race track, Chris Low had some additional cash to invest in a business. The most promising opportunity at the time was in...

Question three The following balances were extracted from the books of Mali Mi ngi Limited as at 31 August 2020 : Particulars KES 000 Capital: Authorized 3,500 Issued and fully paid ordinary shares...

AJ. Smith Company started business on January 1, 2020, and the following transactions occurred in its first year 1 2 3. On January 1, the company issued 13,100 common shares at $25 per share. On...

Hi this question is very confusing. Can you please answer? Please elaborate steps as well: (a) The table below lists some partial information about a firm. Assume that the number of shares...

i need help on getting my company E out of the negative. below is information on the situation Company Messages New special decision: Competitor's Safety Problem (Be sure to handle this on the...

I need the calculation and mathemathical steps for the following question: B . Minimum Cost Schedule ( 2 5 points ) . Information concerning a project is given in the table below. Activity Normal...

Develop a pro forma income statement and balance sheet for the years 2016, 2017, and 2018. Assumptions should be based on historical data continue and Using either a DCF valuation, multiple...

6. Notes to financial statements ? describe those notes your team feels would most likely affect an investor?s decisions 7. Independent auditor?s report a. Who is responsible for the preparation and...

Apple Inc. CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except number of shares which are reflected in thousands and per share amounts) September 28, 2019 Years ended September 29, 2018...

Pls find the attached financial documents. Excel has to be filled out UV5144 Rev. Sept. 1, 2011 CARDED GRAPHICS, LLC: SHEETER REPLACEMENT DECISION I don't play to lose. Murry Pitts, Carded Graphics...

Kaitlin is putting money into a checking account. Lety represent the total amount of money in the account (in dollars). Letx represent the number of weeks Kaitlin has been adding money. Suppose that...

Kemano Motorcycles sold $800,000 of receivables to a factor to increase the companys liquidity. The company chose to factor these receivables without recourse. In exchange for these receivables, the...

5 2 Multiple Choice 2 . 5 pointsIncrease spending on online marketing efforts.Focus on imitating the most successful products of competitors.Go against the trend and raise prices.Install modern...

Pharoah Company reported the following amounts for 2022: Raw materials purchased $95,200 Beginning raw materials inventory 5,824 Ending raw materials inventory 5,040 Beginning finished goods...