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:

Budget Line

A line that shows the different combinations of two products a consumer can purchase with a specific money income, given the products’ prices.

Marginal Utility

The additional satisfaction or utility a consumer gets from consuming one more unit of a good or service.

Total Utility

The total satisfaction received from consuming a particular quantity of a good or service.

Budget Line

A graphical representation of all possible combinations of two goods that a consumer can purchase with a given income and prices of the goods.