Anthony believes that the price of Dow Chemical stock is going to fall in the near future. What type of high-risk transaction would he most likely consider concerning Dow stock?

Question

Quizplus · Accepted Answer

If Anthony believes that the price of Dow Chemical stock is going to fall in the near future, he would most likely consider selling short. Selling short is a high-risk transaction in which an investor borrows shares from a broker, sells them on the market, and hopes to buy them back at a lower price to return them to the broker and profit from the difference. This strategy is typically used when an investor believes that a stock's price will fall, and can lead to significant losses if the price goes in the opposite direction.

Anthony Believes That the Price of Dow Chemical Stock Is