What is a ponzi scheme yahoo answers

what is a ponzi scheme yahoo answers

what is a ponzi scheme?

Jul 09,  · A Ponzi scheme is a fraudulent investment operation that pays returns to separate investors, not from any actual profit earned by the organization, but . Apr 19,  · A Ponzi scheme is a fraudulent investment operation that pays returns to investors from their own money or money paid by subsequent investors rather than from any actual profit earned. The Ponzi.

There will be no changes to other Yahoo properties or services, or your Yahoo account. You can find more information about the Yahoo Answers shutdown and how to download your data on this help page. We, the little people at the bottom, give the site "hits" Ponzi scheme: "a form of fraud in which belief in the success of a nonexistent enterprise schsme fostered by the payment of quick returns to the first investors from money invested ia later investors:".

The Ponzi scheme generates how to clean stainless steel spoons for early investors by acquiring new investors.

That doesn't describe Y! A at all. No-one here has invested, and no effort is made by anyone to get new investors. Answer Save. Weasel McWeasel Lv 7. Favourite answer. Yahoo profits by selling advertising here. You may have a point there. Without a doubt. Ponzi scheme: "a form of fraud in yxhoo belief in the success of a nonexistent enterprise is fostered yahoo the payment of quick returns to the first investors from money invested by later investors:" Clearly not, since YA is a free site.

You obviously have no idea what a ponzi scheme is. No, there's no money involved. Squidmaster Lv 7. Still have questions? Get answers by asking now.

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Mar 12,  · what is a ponzi scheme? Jul 22,  · A Ponzi scheme is similar to our Social Security System. In that present payments are used to pay receipents who are collecting [benefiting] from payouts. Nov 27,  · "A Ponzi scheme is a fraudulent investing scam promising high rates of return with little risk to investors. The Ponzi scheme generates returns for early investors by acquiring new investors." That.

There will be no changes to other Yahoo properties or services, or your Yahoo account. You can find more information about the Yahoo Answers shutdown and how to download your data on this help page. A Ponzi scheme is a fraudulent investment operation that pays returns to separate investors from their own money or money paid by subsequent investors, rather than from any actual profit earned.

The Ponzi scheme usually entices new investors by offering returns other investments cannot guarantee, in the form of short-term returns that are either abnormally high or unusually consistent.

The perpetuation of the returns that a Ponzi scheme advertises and pays requires an ever-increasing flow of money from investors to keep the scheme going. The system is destined to collapse because the earnings, if any, are less than the payments to investors.

Usually, the scheme is interrupted by legal authorities before it collapses because a Ponzi scheme is suspected or because the promoter is selling unregistered securities. As more investors become involved, the likelihood of the scheme coming to the attention of authorities increases.

While the system eventually will collapse under its own weight, the example of Bernard Madoff demonstrates the ability of a Ponzi scheme to delude both individual and institutional investors as well as securities authorities for long periods: Madoff's variant of the Ponzi Scheme stands as the largest financial investor fraud in history committed by a single person. The scheme is named after Charles Ponzi, who became notorious for using the technique in early He had emigrated from Italy to the United States in Ponzi did not invent the scheme Charles Dickens' novel Little Dorrit described such a scheme decades before Ponzi was born, for example , but his operation took in so much money that it was the first to become known throughout the United States.

His original scheme was in theory based on arbitraging international reply coupons for postage stamps, but soon diverted investors' money to support payments to earlier investors and Ponzi's personal wealth.

Knowingly entering a Ponzi scheme, even at the last round of the scheme, can be rational economically if government bails out those participating in the Ponzi scheme. If governments use newly created currency to bail out the scheme victims, the newly printed currency will devalue the rest of the currency in circulation, meaning all holders of that currency will suffer price inflation. However, Ponzi schemes cannot last forever. A Ponzi Scheme is a fraudulent investment operation that pays returns to separate investors from their own money or money paid by subsequent investors.

You pay a fairly high rate of interest on deposits. The high interest rate is paid from tne newer depositors capital and so on. Obviously you need more and more new investors to keep covering the interest payable. Trending News. USC's Song Girls have an ugly yet familiar story. The chaotic moments before police shooting in Columbus. Analyst: 'Jig is up on Netflix' as subscriber growth slows.

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One which bases its payouts on new customers rather than real profits. Pyramid selling scams work on this basis. Still have questions?

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