DECA Hospitality and Tourism Cluster Practice Exam

Oscar was arrested for what crime after misappropriating company funds?

1. Securities fraud

2. Embezzlement

3. Insider trading

4. Espionage

The correct answer is: Embezzlement

Embezzlement is the correct term to describe the act of misappropriating company funds. It specifically refers to the theft of funds or property entrusted to someone’s care, typically in a professional context. Oscar's actions imply that he had a position of trust within the company and abused that position to take money for his personal use. This is a hallmark of embezzlement, which often involves deceit or breach of fiduciary duty. In contrast, security fraud involves misleading investors or manipulating stock prices to create financial gain—this would not accurately describe the situation if only company funds were taken without related securities. Insider trading refers to the illegal buying or selling of stock based on non-public information, which is distinct from misappropriating funds directly. Espionage involves spying or obtaining secret information, particularly in a corporate or governmental context, which does not align with the description of misappropriating funds for personal use. Therefore, embezzlement is the precise crime that captures the essence of Oscar's actions.