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Quiz: Can You Spot Investment Fraud?

See how prepared you are against scams

By AARP Staff

En español

Published April 12, 2021

8 Questions

836bb449-c5ba-4977-81c0-199ce0ba975f

Quiz: Can You Spot Investment Fraud?

[ {
  "question" : "\"Free lunch investment seminars\" are often used to do what?",
  "answers" : [ {
    "answer" : "Bring investors together to swap investment tips with each other over a nice meal",
    "correctAnswer" : false
  }, {
    "answer" : "Draw people into investing in unsuitable or even fraudulent products",
    "correctAnswer" : true
  }, {
    "answer" : "Share ideas on starting a takeout delivery business",
    "correctAnswer" : false
  }, {
    "answer" : "Allow chefs to test new recipes",
    "correctAnswer" : false
  } ],
  "multiSelect" : false,
  "explanation" : "While some of these money management seminars are legitimate, often the presentations are aggressive sales pitches for investments you don’t need.",
  "hint" : "",
  "hintLink" : "",
  "questionImgCaption" : "",
  "questionImgCredit" : ""
}, {
  "question" : "Which of the following is not a way to protect yourself from fraud online?",
  "answers" : [ {
    "answer" : "Use unsecured public Wi-Fi at an airport to make important financial transactions",
    "correctAnswer" : false
  }, {
    "answer" : "Jump at free downloads and save them to your hard drive",
    "correctAnswer" : false
  }, {
    "answer" : "Both of the above",
    "correctAnswer" : true
  }, {
    "answer" : "Update your operating system, web browsers and email software frequently",
    "correctAnswer" : false
  } ],
  "multiSelect" : false,
  "explanation" : "Unsecured Wi-Fi connections are a playground for hackers.",
  "hint" : "",
  "hintLink" : "",
  "questionImgCaption" : "",
  "questionImgCredit" : ""
}, {
  "question" : "A friend of a friend has told you about a supersafe investment that has ultrahigh returns — well above the current market rate. This type of investment is:",
  "answers" : [ {
    "answer" : "A great opportunity. You’ve got a recommendation and a guarantee from the investor",
    "correctAnswer" : false
  }, {
    "answer" : "Worth looking into, because of the high return and the acquaintance’s recommendation",
    "correctAnswer" : false
  }, {
    "answer" : "Almost certainly a scam",
    "correctAnswer" : true
  }, {
    "answer" : "A suspicious investment you should only put a little money into",
    "correctAnswer" : false
  } ],
  "multiSelect" : false,
  "explanation" : "A guarantee of safety coupled with above-market returns is a red flag of fraud.",
  "hint" : "",
  "hintLink" : "",
  "questionImgCaption" : "",
  "questionImgCredit" : ""
}, {
  "question" : "Which of the following is a red flag during a phone call about a potential investment?",
  "answers" : [ {
    "answer" : "There’s no time to explain the highly complex investing technique",
    "correctAnswer" : false
  }, {
    "answer" : "You’re getting in on the ground floor and the stock doesn’t have a ticker symbol or documentation yet",
    "correctAnswer" : false
  }, {
    "answer" : "Both of the above",
    "correctAnswer" : true
  }, {
    "answer" : "You don’t know the salesperson and they explain they got your name from a list",
    "correctAnswer" : false
  } ],
  "multiSelect" : false,
  "explanation" : "A broker unable to describe an investment technique or give more documentation may be selling unregistered or fraudulent investments.",
  "hint" : "",
  "hintLink" : "",
  "questionImgCaption" : "",
  "questionImgCredit" : ""
}, {
  "question" : "You’ve been watching an investment of yours carefully for a year now, and you notice a trade that you didn’t authorize on your statement. You should:",
  "answers" : [ {
    "answer" : "Wait to see if it looks correct next month",
    "correctAnswer" : false
  }, {
    "answer" : "Call the broker or FINRA to determine what has changed in your account and why",
    "correctAnswer" : true
  }, {
    "answer" : "Liquidate your assets from the investment",
    "correctAnswer" : false
  }, {
    "answer" : "Assume the broker or investor knows what he or she is doing and ignore the issue",
    "correctAnswer" : false
  } ],
  "multiSelect" : false,
  "explanation" : "Unauthorized trades, missing funds or other problems on statements could be genuine errors, or they could indicate fraud. Check to see if you notice anything suspicious.",
  "hint" : "",
  "hintLink" : "",
  "questionImgCaption" : "",
  "questionImgCredit" : ""
}, {
  "question" : "Which statement about investing in gold is true?",
  "answers" : [ {
    "answer" : "You can lose money investing in gold",
    "correctAnswer" : true
  }, {
    "answer" : "The price of gold rarely fluctuates",
    "correctAnswer" : false
  }, {
    "answer" : "You should only buy gold coins from ads featuring celebrities",
    "correctAnswer" : false
  }, {
    "answer" : "Gold-mining stocks never go down in share price",
    "correctAnswer" : false
  } ],
  "multiSelect" : false,
  "explanation" : "The price of gold, like any investment, goes up and down.",
  "hint" : "",
  "hintLink" : "",
  "questionImgCaption" : "",
  "questionImgCredit" : ""
}, {
  "question" : "What’s the best way to check a broker’s record to be sure he or she is on the up-and-up?",
  "answers" : [ {
    "answer" : "Ask for a business card",
    "correctAnswer" : false
  }, {
    "answer" : "Make sure there are diplomas on the wall of the broker’s office",
    "correctAnswer" : false
  }, {
    "answer" : "Search the broker’s name on brokercheck.finra.org",
    "correctAnswer" : true
  }, {
    "answer" : "Ask a friend who knows a lot about investing if he’s heard of the broker",
    "correctAnswer" : false
  } ],
  "multiSelect" : false,
  "explanation" : "BrokerCheck.finra.org (or investor.gov) will give you detailed information about brokers, including any disciplinary actions taken against them.",
  "hint" : "",
  "hintLink" : "",
  "questionImgCaption" : "",
  "questionImgCredit" : ""
}, {
  "question" : "Which of the following is not one of the top investor frauds, according to the North American Securities Administrators Association?",
  "answers" : [ {
    "answer" : "Cryptocurrency scams, such as Bitcoin and other digital currencies",
    "correctAnswer" : false
  }, {
    "answer" : "Promissory notes that offer yields of 15 percent or more",
    "correctAnswer" : false
  }, {
    "answer" : "Workplace retirement plans, such as 401(k) plans",
    "correctAnswer" : true
  }, {
    "answer" : "Foreign currency trading",
    "correctAnswer" : false
  } ],
  "multiSelect" : false,
  "explanation" : "Workplace retirement plans are closely regulated plans that are used safely by millions of investors.",
  "hint" : "",
  "hintLink" : "",
  "questionImgCaption" : "",
  "questionImgCredit" : ""
} ]

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Quiz: Can You Spot Investment Fraud?

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AARP’s Fraud Watch Network can help you spot and avoid scams. Sign up for free Watchdog Alerts, review our scam-tracking map, or call our toll-free fraud helpline at 877-908-3360 if you or a loved one suspect you’ve been a victim.

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