Which one of the following statements is true regarding selling short?
A)When an investor buys stocks and assumes they will increase in value,he or she is using a procedure called selling short.
B)Selling short is selling stock that has been borrowed from a brokerage firm.
C)When you sell short,you buy today,knowing you must sell or cover your short transaction,at a later date.
D)In a short transaction,if the stock increases in value,the investor makes money.
E)To make money in a short transaction,you must hold on the stock for at least one year.

Question

Quizplus · Accepted Answer

Selling short involves borrowing stock from a brokerage firm and selling it with the hope of buying it back at a lower price. This strategy profits from a decline in the stock's price.

Which One of the Following Statements Is True Regarding Selling