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There Is a Practice in the Stock Market Known as "Short

Question 37

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There is a practice in the stock market known as "short selling" whereby an individual will borrow stock from someone, turn around and sell it and then buy it back when it's price has fallen in order to return the stock back to the lender. What expectation does this short seller have about the price of this company's stock? How can he expect to make money at this practice? What could go wrong that might cost him money?

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The short seller is expecting that the p...

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