How is the confidence element established in a Ponzi scheme?
A)By investing in prime bonds.
B)By issuing notarized certificates.
C)By paying returns to initial investors.
D)By returning money to all investors.

Question

Quizplus · Accepted Answer

The confidence element in a Ponzi scheme is established by paying returns to initial investors, which creates the impression of a profitable investment opportunity. As more and more investors are paid returns, word of mouth spreads, and more people are attracted to invest in the scheme, leading to a larger pool of funds being available for the fraudster to use.

How Is the Confidence Element Established in a Ponzi Scheme