Practice Quiz

FINRA Series 63 (NASAA)

Category - Series 63

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Price pegging refers to
  1. the practice of buying large amounts of a security to drive its price up artificially.
  2. the illegal activity of a group of investors who buy and sell a security among themselves to create an artificially high volume of trading in hopes of luring investors to buy the security.
  3. the prohibited practice of excessively trading on a client’s account that is used by some broker-dealers and/or their agents to generate more commissions for themselves.
  4. the unethical practice of investment advisers who issue “buy” recommendations for stocks that they own themselves without disclosing the fact.
Explanation
Answer: A - Price pegging refers to the practice of buying large amounts of a security to drive its price up artificially. This is a form of illegal price manipulation.
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