Is it true that some people make money in the share market by manipulating the price with help of promoters?

Marketing Dec 26, 2020

Expert Solution

Yes, it is true that some people make money in the share market by manipulating the price with the help of the promoters. The promoters help the people to create artificial scarcity of a particular share, leading to an increase in the price of the share due to excess demand. The promoters do so, to receive a high commission from the people hiring them. They also distort the information that is made available to the other prospective investors. This leads to a problem of asymmetric information, causing market failure.

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