If a stock is sold short,the equity in the investor's account will go up if the stock

Question

Quizplus · Accepted Answer

Short selling involves borrowing and selling shares of a stock with the hopes of buying them back at a lower price to make a profit. Therefore, if the price of the stock goes down, the investor will be able to buy back the shares at a lower price, making a profit and increasing the equity in their account. If the price goes up, the investor will have to buy back the shares at a higher price, resulting in a loss and a decrease in equity. Splitting the stock has no direct impact on the short sell position. Therefore, the correct answer is A.

If a Stock Is Sold Short,the Equity in the Investor's