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Canadian Securities Course (CSC) Practice Exam · Question

Which of the following is an example of 'market manipulation'?

Market manipulation involves intentionally creating false or misleading appearances with respect to the market for a security. Spreading false information to in

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Question: Which of the following is an example of 'market manipulation'?

Answer options:

  • An analyst issuing a 'buy' rating based on thorough research.
  • A company using stock buybacks to reduce outstanding shares. ✅ Spreading false information to artificially inflate a stock's price (pump and dump).
  • An investor selling a large block of shares at the market price.

Correct answer: Spreading false information to artificially inflate a stock's price (pump and dump).

Explanation: Market manipulation involves intentionally creating false or misleading appearances with respect to the market for a security. Spreading false information to influence stock prices is a classic example of this illegal activity.

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