Ben Borrowed Some Securities from His Broker and Planned to Replace

question 103

Multiple Choice

Ben borrowed some securities from his broker and planned to replace them at a later date.Which of the following strategies did he use?

• A) A call option
• B) Direct investing
• C) Buying on margin
• D) A put option
• E) Selling short

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Definitions:

Junk Bond Market

A segment of the financial market that deals with high-risk, high-yield bonds issued by corporations with lower credit ratings.

International Mergers

The combination of companies from different countries into a single entity.

Poison Pill

A defensive strategy used by companies to avoid hostile takeovers by making the company less attractive to the potential acquirer.

Golden Parachutes

Large financial compensation packages provided to executives upon termination, usually in the context of a merger or takeover.