SIE practice questioneasyMarket Manipulation
Which of the following is an example of market manipulation prohibited by the SEC?
- ACreating false volume through wash sales.✓ Correct answer
- BInvesting in mutual funds.
- CPlacing a limit order.
- DBuying Treasury bonds for a retirement account.
Explanation
Why A — Creating false volume through wash sales.
Market manipulation, such as wash sales (trading with oneself to create fake activity), is illegal. The other options are legitimate investment activities.
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