SIE Exam Question 806: Answer and Explanation

Question: 806

Which of the following is the illegal trading practice of manipulating the market by buying and selling a security to create the illusion of high trading activity and to attract other traders who may increase the price?

• A. Capping and pegging
• B. Front running
• C. Painting the tape
• D. Trading ahead

Correct Answer: C

Explanation:

Painting the tape is the illegal trading practice of manipulating the market by buying and selling a security to create the illusion of high trading activity and to attract other traders who may increase the price.