Which of the Following Statements Is True Regarding Short Sales

question 50

Multiple Choice

Which of the following statements is true regarding short sales?

• A)An investor can only remain in a short sale 6 months or less.
• B)Short sales can be done on either a cash or margin account.
• C)Short sellers borrow the stock sold short from the exchanges.
• D)Dividends paid during the short sale must be covered by the seller.

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Definitions:

Demand

The amount of a product or service that buyers are prepared and capable of buying at different price levels over a specific time frame.

Income

Earnings acquired on a consistent basis through employment or investments.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price within a specific time period.

Quantity Supplied

The amount of a good or service that producers are willing and able to sell at a specific price, over a specified period of time.