Which of the following are true concerning short sales of exchange-listed stocks?
I. Proceeds from the short sale must be kept on deposit with the broker.
II. Short-sellers must post margin with their broker to cover potential losses on the position.
III. 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 true, as proceeds from a short sale must be kept on deposit with the broker to cover the potential obligation to deliver shares. 
II is true, as short-sellers must post margin to cover potential losses on the position. 
III is false, as interest is typically earned by the broker on any cash held as margin, not the short-seller.

Which of the Following Are True Concerning Short Sales of Exchange-Listed