The answers is b. But iam confused as to how he bought it considering the stock is not listed in stock exchange
Is this Kaplan-Schweser? Looks like a poorly written question. I wouldn’t worry about it honestly. Maybe they’re referring to pink sheets. The actual exam will be worded more clearly. For whatever reason they’re saying it trades 500 shares per week just not on a major exchange. This won’t be the type of gotcha that CFA will try to hit you with, in my experience. There are plenty of other gotchas they can use with the wide source of material. But in any case, pink sheets or not, they are saying that an insider buying more shares on non public info is a general ethics no-no.
This is a question from offical cfa institute book
Well they must be referring to pink sheets then. In any case see above, an insider trading on non-public info is an ethics no-no regardless of whether it’s using a public exchange or OTC. I do not think this will be worded in this tricky way on the exam, but in any case an insider buying on material non public info is never going to be okay on ethics questions. Good luck man you got this.
Poorly written question. What is wrong CFAI ?
All assumptions based on the question would be wrong 
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Is the president covered employee ?
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Is the company listed or privately held ? That’s a big difference. With privately held there’s hardly any qs of insider information as all are deemed privy to what is helping the company
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Regardless of the situation , personal finance and investment is always delinked from the company’s position. Unless it is specifically mentioned about market making or market manipulating in this case.
Poor qs
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CFA’s had some awkwardly worded questions lately, particularly in some of their “official” XYZ society-written practice mock exams that now replace the prior 2 years’ actual exams that used to be available in the CFA Candidate Resources. Thankfully this issue hasn’t spilled over into the actual exams yet, from my experience at least.
They say the company isn’t listed on a stock exchange yet its stock still trades 2,000 shares per month according to the question, eh go figure. My guess is they’re alluding to pink sheets but it’s not going to be worded in this awkward way on the exam in all likelihood. If something like this did appear, it could be contested and possibly discarded or discounted for MPS calculation purposes. But who knows.