Which of the Following Statements Is True Regarding Short Sales

question 50

Multiple Choice

Which of the following statements is true regarding short sales?

• A)An investor can only remain in a short sale 6 months or less.
• B)Short sales can be done on either a cash or margin account.
• C)Short sellers borrow the stock sold short from the exchanges.
• D)Dividends paid during the short sale must be covered by the seller.

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Definitions:

Payments to Employees

Refers to all forms of compensation, both monetary and in-kind, given to employees for their services.

Payments of Interest

The act of paying the interest charge on a loan or debt, typically made at regular intervals over the lifetime of the loan.

Payments for Income Tax

Financial outlays made by individuals or corporations to government entities in accordance with taxable income or profits.

Unearned Rental Revenue

Income received from tenant payments before the rental period has occurred, recorded as a liability until earned through the passage of time.