A Buyer Engages in Short Selling When He or She

question 53

Multiple Choice

A buyer engages in short selling when he or she ________.

• A) thinks that a stock has high long-term growth potential
• B) wants to diversify his or her portfolio
• C) believes that a stock's price is about to drop
• D) wants to partially liquidate his or her portfolio
• E) thinks that a stock has high short-term growth potential

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Definitions:

Provision

An amount set aside for anticipated future liabilities or losses in the financial statements of a company.

Termination Payments

Payments made to employees when they leave a company, which can include severance pay, unused vacation pay, and other compensations.

Short-Term Employee Benefit

consists of benefits, such as salaries, wages, social security contributions, and paid annual leave, provided to employees that are expected to be settled within twelve months after the employee provides the related service.

Defined Contribution Fund

A retirement plan in which the employee and/or the employer contribute to an individual account for the employee, with the future benefit depending on the contributions made and the investment performance of the account.