If You Are a Stock Trader and Your Trading Proceeds

question 82

Multiple Choice

If you are a stock trader and your trading proceeds are not subject to taxes,what strategy below would work best if you expected that the drop in share price after the ex-dividend date is less than the amount of the dividend?

• A) buy the shares immediately before the ex-dividend date and then sell them immediately after the ex-dividend date
• B) sell the shares immediately before the ex-dividend date and then buy them back immediately after the ex-dividend date
• C) buy the shares immediately before the ex-dividend date and then buy more of them immediately after the ex-dividend date
• D) none of the above

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Definitions:

Economy

The economy encompasses all activities related to production, consumption, and trade of goods and services in an area, showcasing how resources are managed and utilized.

Implementation Lag

The delay between the time a policy is enacted and the time its effects are observed in the economy.

Active Approach

A policy or management style that involves regular, dynamic decision-making and interventions to achieve specific goals, in contrast to a passive, hands-off approach.

Discretionary Policy

Discretionary Policy involves the deliberate use of monetary or fiscal policy changes by government policymakers to address economic issues.