Which of the following is incorrect in regard to short selling?
A) Naked short selling involves selling a stock short without first borrowing the stock.
B) During the credit crisis, the SEC temporarily protected more than 800 firms from short selling.
C) The SEC's uptick rule prevents speculators from taking a short position in stocks that have declined at least 15 percent for the day, except when the most trade resulted in an increase in the stock price.
D) During the credit crisis, some short sellers focused particularly on the stocks of financial institutions.
E) none of the above

Question

Which of the following is incorrect in regard to short selling?
A) Naked short selling involves selling a stock short without first borrowing the stock.
B) During the credit crisis, the SEC temporarily protected more than 800 firms from short selling.
C) The SEC's uptick rule prevents speculators from taking a short position in stocks that have declined at least 15 percent for the day, except when the most trade resulted in an increase in the stock price.
D) During the credit crisis, some short sellers focused particularly on the stocks of financial institutions.
E) none of the above

Quizplus · Accepted Answer

The SEC's uptick rule requires that a security must tick up in price before a short sale can be executed, but it does not have a 15% threshold or exception for upticks resulting from the most recent trade. This statement is incorrect.

Which of the Following Is Incorrect in Regard to Short