SIE practice questioneasyMarket Manipulation
A broker-dealer enters orders to create the appearance of active trading in a security. What is this practice called?
- APosition trading
- BArbitrage
- CHedging
- DMarket manipulation✓ Correct answer
Explanation
Why D — Market manipulation
Creating false trading activity is market manipulation, which is illegal. Arbitrage and hedging seek legitimate profits; position trading involves holding positions.
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