Which of the following are true concerning short sales of exchange listed stocks?
I.A short sale is permitted only if the last recorded change in the stock's price was positive
II.Proceeds from the short sale must be kept on deposit with the broker
III.Short-sellers must post margin with their broker to cover potential losses on the position
IV.The short-seller earns interest on any cash deposited with the broker that is used to meet the margin requirement

Question

Quizplus · Accepted Answer

I is false. A short sale can be made whether the last change in the stock's price was positive or negative.
II is true. Proceeds from the short sale must be kept on deposit with the broker.
III is true. Short-sellers must post margin with their broker to cover potential losses on the position.
IV is false. The broker earns interest on any cash deposited by the short-seller to meet the margin requirement.

Which of the Following Are True Concerning Short Sales of Exchange