Pyramid scheme

Definition:

An illegal, fraudulent scheme in which a con artist convinces victims to invest by promising an extraordinary return but instead simply uses newly invested funds to pay off any investors who insist on terminating their investment.

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

Term of the Day

Buying the index

Purchasing the stocks in the S&P 500 in the same proportion as the index to achieve the same return.

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