ECONOMICS
MONEY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A scheme that attempts to beat the overall market’s return by investing in high-cost index funds.
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A scheme that attempts to boost the price of a stock through recommendations based on false or misleading statements.
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A scheme which pools investors money together but only a small percentage of the pool is actually invested.
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A scheme where an investor collects your money for investment but never actually makes a purchase and instead keeps the money for themselves.
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Detailed explanation-1: -Pump-and-dump is a form of fraud that encourages investors to buy shares in a company to increase the cost of the shares artificially. It can be used to boost the price of a stock through recommendations based on false or misleading information.
Detailed explanation-2: -In a pump and dump scheme, fraudsters typically spread false or misleading information to create a buying frenzy that will “pump” up the price of a stock and then “dump” shares of the stock by selling their own shares at the inflated price.
Detailed explanation-3: -What Is Pump-and-Dump? Pump-and-dump is a manipulative scheme that attempts to boost the price of a stock or security through fake recommendations. These recommendations are based on false, misleading, or greatly exaggerated statements.
Detailed explanation-4: -A pump-and-dump scheme usually goes like this: a group of insiders plans to buy a particular stock, like a penny stock, which are riskier types of equities. The insiders then spread false or misleading information about the company to increase the demand for the stock and drive up the price.
Detailed explanation-5: -“Pump-and-dump” (“P&D”) schemes are schemes that involve artificially inflating the price of a stock by publicly touting false and misleading statements to the market place, and then selling the stock in order to make a profit.