SIE practice questionhardMarket Manipulation and Account Types
An agent executes trades between two controlled accounts to create artificial trading volume. What is this practice called?
- AMarket making
- BMatched orders (painting the tape)✓ Correct answer
- CLegitimate market arbitrage
- DBack-end load
Explanation
Why B — Matched orders (painting the tape)
Matched orders are manipulative and illegal. Market making is providing liquidity. Arbitrage and back-end loads are unrelated to manipulation.
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