GO
Loading...

American Greed: Madoff Behind Bars

Quiz: QUIZ: Ponzi Schemes

Question 1 of 10

Which of the following is not a warning sign indicating a Ponzi scheme?

  1. High investment returns with no risk
  2. Overly consistent returns
  3. Overly simple investment strategies
  4. Unregistered investments
Correct!

The website of the Securities and Exchange Commission offers a seven-point list of things to watch out for that may indicate a Ponzi scheme, and "overly simple investment strategies" does not appear on that list. In fact, one of the things to watch out for is a secretive or complex investment strategy. According to the site, "Avoiding investments you don't understand or for which you can't get complete information is a good rule of thumb."

SOURCE: Ponzi Schemes – Frequently Asked Questions | U.S. Securities and Exchange Commission