SIE practice questionhardMarket Manipulation
A group of investors manipulates the price of a thinly traded stock by rapidly buying and selling among themselves to give a false impression of market activity. This is known as:
- AFreeriding
- BInsider trading
- CBreakpoint selling
- DMatched orders (painting the tape)✓ Correct answer
Explanation
Why D — Matched orders (painting the tape)
Matched orders ('painting the tape') create artificial trading volume. Insider trading involves material nonpublic info; breakpoint selling is mutual fund sales practice, and freeriding is buying and selling without payment.
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