One Way for an Investor to Protect Themselves When Selling

question 2

Multiple Choice

One way for an investor to protect themselves when selling a stock short is to

• A) not make the sale on margin.
• B) buy an offsetting amount of the same shares coincident with the short sale to perfectly hedge the transaction.
• C) issue a stop buy limit order at a price somewhere above the short sale price.
• D) An investor cannot protect against large losses in a short sale transaction.

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