If the Broker Does Not Hold the Stock That a Client

question 6

Multiple Choice

If the broker does not hold the stock that a client wishes to sell short, another method to obtain the securities for the sale is through

• A) margin buying
• B) stock swaps
• C) securities lending
• D) credit buying

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Definitions:

Quick Assets

Highly liquid assets, including cash, accounts receivable, and marketable securities, which can be quickly converted into cash.

Short-Term Investments

Short-term investments are financial assets that are expected to be converted into cash within one year and are typically used by firms to manage surplus cash efficiently.

Current Receivables

Short-term financial assets that are due to be received within one year, typically from customers who owe the company money for goods or services provided.

Quick Ratio

A liquidity measure that indicates a company's ability to cover its short-term liabilities with its most liquid assets, excluding inventory.