How Could a Multi Level Marketing Scheme for the Sale

question 49

Multiple Choice

How could a multi level marketing scheme for the sale of cookware through house parties constitute a pyramid scheme?

• A) if the pricing of the product is unreasonably low
• B) if the participants are prohibited from engaging in door to door or Internet sales
• C) if participants must pay money for the right to receive compensation for recruiting new participants
• D) if the participant is prohibited from selling other products

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Definitions:

Asset-Backed Bonds

Bonds that are secured by a pool of assets, such as loans or receivables, which generate the cash flow to pay bondholders.

TIPS

Treasury Inflation-Protected Securities, a type of U.S. Treasury bond designed to help investors protect against inflation.

Maturity

The date on which the principal amount of a financial instrument, such as a bond or loan, becomes due and is repaid to the investor.

Coupon

The yearly rate of interest distributed on a bond, represented as a percentage of its nominal value.