Which One of the Following Describes a Short Position

question 71

Multiple Choice

Which one of the following describes a short position?

• A)Purchasing a security on margin
• B)Selling a security that you originally purchased on margin
• C)Loaning a security to your broker to cover a margin call
• D)Having less equity than required in your margin account
• E)Selling a security that you do not own

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Definitions:

Risk Averse

A description of an investor's or an individual's preference for avoiding loss rather than making a gain.

Portfolio

An assortment of financial assets including stocks, bonds, commodities, cash, and equivalents, as well as mutual funds and exchange-traded funds (ETFs).

Standard Deviation

A statistical measure that quantifies the variation or dispersion of a set of data points.

Fire Insurance

A type of insurance policy that covers damage and losses caused by fire.