Magnitude-Probability Test

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M

Magnitude-Probability Test

Definition

A test adopted by the Supreme Court in Basic Inc. v. Levinson, 485 U.S. 224 (1988), to determine whether facts are material. Under the probability-magnitude test, materiality is determined by balancing the probability that an event will happen against the potential magnitude of the event in light of the totality of the company activity.

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— Berreman v. West Publishing Company

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