You short sell 100 shares of RBC at $50. Theoretically, your maximum profit is _____ , while your maximum loss is_____ (ignore transactions costs).
A) unlimited, $5000
B) $5000, unlimited
C) $5000, $5000
D) unlimited, unlimited

Question

Quizplus · Accepted Answer

Your maximum profit from a short sale occurs if the stock price goes to $0, making your profit $50 x 100 shares = $5000. Your maximum loss is unlimited because there's no upper limit to how high the stock price can rise.

You Short Sell 100 Shares of RBC at $50