In a "Pump-And-Dump" Scheme the Owners of the Company

question 6

Multiple Choice

In a "pump-and-dump" scheme the owners of the company:

• A) Falsely claim the business has high growth potential.
• B) Artificially raise the price of the share.
• C) Sell the share at a high price.
• D) All of the above.

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Definitions:

Black-Scholes Option

A mathematical model used to calculate the theoretical price of European put and call options, not accounting for dividends.

Continuous Compounding

The mathematical limit that compound interest can reach if it’s computed and added to the principal balance continuously, leading to exponential growth.

Time Value

Time Value refers to the additional amount that an investor is willing to pay for an option or other financial instrument due to its potential to increase in value over time.

Time Value

The portion of an option's premium that is based on the amount of time until the expiration of the option contract.