An arrangement with a broker to borrow stocks from them and then sell it in the market,with the hope that they earn a profit by buying the stock back again after it has fallen in price is called
A) behavioral finance.
B) short sales.
C) smart money.
D) random walk.

Question

Quizplus · Accepted Answer

The arrangement described is known as a short sale, where the investor borrows stocks from a broker and sells them in the market, hoping to buy them back at a lower price and earn a profit. This is a common practice in the stock market and is often used as a hedge against potential losses or as a bet on the stock's decline. Option A is a field of study in psychology that looks at how people make financial decisions. Option C refers to the group of investors who are believed to have inside information and make profitable trades. Option D is a theory that suggests stock prices follow a random pattern and cannot be predicted.

An Arrangement with a Broker to Borrow Stocks from Them