A ________ Is an Investment Fraud in Which a Manager

question 12

Multiple Choice

A ________ is an investment fraud in which a manager collects funds from clients, claims to invest those funds on their behalf, and reports extremely favorable investment returns, but in fact uses the funds for his or her own use.

• A)Ponzi scheme
• B)bonsai scheme
• C)statistical arbitrage scheme
• D)pairs trading scheme

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Definitions:

Inflation

The rate at which the general level of prices for goods and services rises, eroding purchasing power over time.

High Interest Rates

A condition in the financial market where the cost of borrowing money is elevated, usually due to high inflation, increased demand for credit, or tight monetary policy.

Capital Item

Long-term assets or investments used in the production of goods and services, such as buildings, machinery, and equipment.

Machinery

Machines collectively or a system of devices that operate together to perform a particular task.