SIE practice questionhardMarket Manipulation - Pump and Dump
An individual spreads false positive rumors to inflate a stock’s price and then sells their shares. What is this scheme known as?
- AInsider trading
- BPump and dump✓ Correct answer
- CShort squeeze
- DGreenmail
Explanation
Why B — Pump and dump
'Pump and dump' involves spreading false info to inflate prices before selling. Insider trading is based on nonpublic info; a short squeeze is different; greenmail involves buying firms to avoid takeovers.
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