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Basics Beginner:
Understanding and Avoiding Fraud and Scams
Test your knowledge
Choose wisely. There is only one correct answer to each question.
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1.
If you are unsure whether a broker is licensed, you should contact _______.
Choose wisely. There is only one correct answer.
Your state securities regulator
The FBI
The federal government
Any of the above
Your state securities regulator. Brokers are registered at the state level.
2.
Telephone swindlers demand immediate compliance from their victims because _______.
Choose wisely. There is only one correct answer.
They don't want victims to take time to reflect on what's being offered
They don't want victims to seek advice from others
Both of the above
None of the above
Both of the above. Swindlers don't want their scams to be exposed.
3.
Why are pyramid schemes unsustainable by nature?
Choose wisely. There is only one correct answer.
There are never enough participants to keep the pyramids growing
Membership fees are too low
They pay too much in dividends to their members
They're not unsustainable; they can last a very long time, in fact
There are never enough participants to keep the pyramids growing. They are a fast way for scammers to defraud others.
4.
Why are older people common targets for romance scammers?
Choose wisely. There is only one correct answer.
They don't understand social media.
They are usually single.
They usually have more assets than younger people.
They aren't.
They usually have more assets than younger people. Older people can be prime targets because of their assets.
5.
A blockchain is a transparent ledger of _______ transactions that anyone can view.
Choose wisely. There is only one correct answer.
Account balances
Passwords
Transactions
Transactions. Blockchains maintain a decentralized, secure record of transactions.
6.
Why are so many frauds tailored to the elderly?
Choose wisely. There is only one correct answer.
Many elderly don't like to turn down people in need
Many elderly have a lot of money
Many elderly are reluctant to seek justice for crimes committed against them
All of the above
All of the above. Though these do not describe all elderly, they describe enough that criminals target them.
7.
Which of the following job offers is most likely a work-at-home scam?
Choose wisely. There is only one correct answer.
Sewing purses at home for $10 apiece
Processing rebates for two hours a day for $500
Typing reports at 1 cent per word
A work-at-home job that requires a bachelor's degree
Processing rebates for two hours a day for $500. Pay that is far above market rates is a classic sign of a scam.
8.
Why might a money-transfer opportunity require that you sign a non-disclosure agreement?
Choose wisely. There is only one correct answer.
It is standard operating procedure when transferring money
To prevent you from discussing the deal with other people
For income tax purposes
The government requires non-disclosure agreements when you transfer money
To prevent you from discussing the deal with other people. This is a common tactic in investment fraud.
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