Which of the Following Statements Is True Regarding Short Sales

question 31

Multiple Choice

Which of the following statements is true regarding short sales?

• A) An investor can only remain in a short position for six months or less.
• B) Short sales can be done on either a cash or margin account.
• C) Short sellers borrow the stock sold short from the exchanges.
• D) Dividends paid during the short sale must be covered by the seller.

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Definitions:

Economies Of Scale

The cost advantage achieved by businesses when production becomes efficient, leading to a lower cost per unit as output increases.

Virtual Companies

Companies that rely on a variety of supplier relationships to provide services on demand. Also known as hollow corporations or network companies.

Few Suppliers

Refers to a market situation where only a limited number of vendors provide a certain product or service, potentially leading to less competition and higher prices.

JIT Systems

Inventory management systems that seek to minimize inventory levels by scheduling material arrivals only when they are needed in the manufacturing process.