Question

According to your text a _______ is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors

Answer 1

Answer:

The correct answer to the following question will be the "Ponzi Scheme".

Explanation:

• A Ponzi scheme is a form of extortion that hooks investments and pays benefits from more modern investors to earlier investors with funds.
• It will retain a viable business illusion as long as the new lenders contribute additional funds and as long as most creditors do not expect full compensation and yet still believe throughout the non-existent resources they are supposed to ever own.
• It involves paying supposed returns from funds accumulated by investors to existing shareholders.

Therefore, the Ponzi scheme is the right answer.