Which of the following constitutes material inside information?

Material inside information refers to non-public information that could influence an investor's decision to buy or sell a stock. It typically involves information that is significant enough to sway the stock's market price.

In this case, potential litigation against the company is considered material inside information. This is because such litigation can lead to financial consequences, reputational damage, or other factors that could significantly impact the company's future performance and, consequently, its stock price. Investors would likely find this information crucial in making informed investment decisions about the company.

On the other hand, a minor adjustment in quarterly profit, while it might be relevant, does not rise to the level of materiality compared to the potential implications of litigation. General market trends are broader in nature and typically do not pertain to specific companies, making them less relevant for individual stock decisions. Similarly, details about the company's promotional events are often considered routine operational aspects and do not generally affect investors' perceptions of the company's value in a substantial way. Ultimately, it is the potential litigation that stands out as information that could materially impact investor decisions.