Which of the Following Statements About Short Selling Is False

question 47

Multiple Choice

Which of the following statements about short selling is false?

• A) At some time in the future,the speculator must buy the security to "cover" the short sale.
• B) Short selling is legal.
• C) Short selling involves selling a security that you do not own by borrowing it from your broker.
• D) Speculators may profit from short selling when stock prices are falling.
• E) Speculators will generally profit from short selling when the company puts out positive information about its sales prospects.

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Definitions:

Agricultural Production

The process and outcome of cultivating crops and livestock for human use and consumption.

Interest Rate

The percentage of a sum of money charged for its use, often expressed as an annual percentage.

Say's Law

A principle attributed to French economist Jean-Baptiste Say, suggesting that supply creates its own demand, meaning production inherently generates the demand for goods and services.

Consumption

The action or process of using goods and services for personal needs or desires, typically considered as a component of GDP.