What Is the Meaning of "Short Sell

question 41

Multiple Choice

What is the meaning of "short sell"?

• A)Buy shares from a brokerage firm and enter into a forward transaction to sell the shares at today's price on a future date.
• B)Sell the shares at today's price to an investor and enter into an option agreement to buy the shares back in near future.
• C)Buy shares from one brokerage firm and sell the shares to another brokerage firm with a view to make quick money.
• D)Borrow shares from a brokerage and sell the shares at today's price with the intention to repay the borrowed stock they sold at some future time when the stock is trading for a lower price.

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Definitions:

Indirect Method

A cash flow statement approach that adjusts net income for the effects of non-cash transactions and changes in working capital to calculate cash from operating activities.

Accumulated Depreciation

The cumulative total of depreciation costs noted for an asset since it was acquired.

Original Cost

The initial purchase price or acquisition cost of an asset or investment.

Statement of Cash Flows

It's a fiscal summary that tracks changes in balance sheet entries and the impact of income on cash and equivalents, sorting these modifications by operating, investing, and financing functions.