When an Investor Establishes a Position in a Security

question 4

Multiple Choice

When an investor establishes a position in a security:

• A)They are said to be long if they purchase the security for their account
• B)They are said to be long if they sell the security for their account
• C)They are said to be short if they sell the security for their account
• D)They are said to be short if they purchase the security for their account
• E)Both a and c

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Definitions:

Compounded 12 Times Per Year

Refers to the process of applying interest to an original amount of money, with the interest being calculated and added twelve times in a year.

Compounded 365 Times Per Year

A term used in finance to indicate that interest is calculated and added to an account's balance 365 times in one year, or daily.

Composition

The process or result of combining two or more functions by applying one function to the result of the other.

\(5x+9\)

An algebraic expression representing a linear function.