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:

Balance Sheet Accounts

Categories within the balance sheet that include assets, liabilities, and shareholders' equity, each of which is essential for showcasing the company's financial health.

Natural Business Year

A fiscal year that ends when a business's sales activities are at their lowest point, facilitating easier inventory and activity analysis.

12-month Period

A 12-month period typically refers to a full year, used in financial reporting and analysis to compare performance or changes over the span of a year.

Income Summary Account

A temporary account used in the closing process to summarize the period's revenues and expenses before transferring the net income or loss to retained earnings.