LOS f: Describe the process of selling a stock short and discuss an investor's likely motivation for selling short.
Q1. A short seller:
A) often also places a stop loss sell order.
B) loses if the price of the stock sold short decreases.
C) does not receive the dividends.
Q2. Which of the following statements about selling a stock short is least likely accurate?
A) The seller must return the securities at the request of the lender.
B) The short seller may withdraw the proceeds of the short sale.
C) The seller must inform their broker that the order is a short sale before completing the transaction.
Q3. An investor can profit from a stock price decline by:
A) placing a stop buy order.
B) purchasing a call option.
C) selling short.
Q4. Which of the following statements about the functioning of securities markets is least accurate?
A) Maintenance margin is the required percentage of an investor's equity compared to the total value of the stock after the investor trades on margin.
B) Block houses, where institutional traders buy and sell large blocks of shares, are also called upstairs traders.
C) A short seller receives the dividend on the stock but may not withdraw it from his account until the position is closed.
Q5. An order placed to protect a short position is called a:
A) stop loss sell.
B) stop loss buy.
C) protective call.
Q6. Regarding the technical points affecting the short sales of a stock, which of the following statements is most accurate?
A) The lender must deposit margin to guarantee the eventual return of the stock.
B) Stocks can only be shorted in a down market.
C) The short seller must pay all dividends due to the lender of the shorted stock.
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发表于 2009-3-2 12:48
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