Which of the Following Is Correct Concerning Short Sales of Stock

question 34

Multiple Choice

Which of the following is correct concerning short sales of stock?

• A) At the time the short sale is made, the taxpayer does not deliver to the purchaser the shares sold short.
• B) At the time the short sale is made, the taxpayer delivers to the purchaser the shares sold short.
• C) At the time the short sale is made, the taxpayer may already own the shares sold short.
• D) At the time the short sale is made, the taxpayer always already owns the shares sold short.
• E) None of the above.

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Definitions:

Cash Payback Period

The period of time required for the return on an investment to "pay back" the sum of the original investment.

Amortization Period

The length of time over which an intangible asset is depreciated or an amount of money is amortized, typically reflecting the asset's useful life.

Net Cash Flows

is the total amount of money being transferred into and out of a business, indicating its financial health.

Initial Cost

The purchase price of a fixed asset plus all costs to obtain and ready it for use.