An Investor with a Long Position in a Security Will

question 78

Multiple Choice

An investor with a long position in a security will make money:

• A)if the price of the security increases.
• B)if the price of the security declines.
• C)if the price of the security remains stable.
• D)only if the security has been purchased on margin.
• E)only by shorting the security.

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Definitions:

Average Rate

A calculation used to determine the mean value of a set of rates over a specified period, often applied in finance to find the average interest rate.

Operating Income

The profit realized from a business's core operations before taxes and interest.

Net Cash Inflows

The amount of cash that a company receives minus the amount of cash it spends over a certain period.

Profitability Computed

Refers to the calculation of a company's earnings versus its expenses to determine financial performance.