A stockbroker trades shares she does not own with an obligation of later repayment, and in the hope that the price of traded shares will fall. She then repays share debt with shares purchased at a lower price and pockets the spread between initial share price and repayment price. This attempt to profit from a falling stock price is known as _____. a. insider trading churning b. arbitrage trading c. short selling d. going long

Answers

Answer 1
Answer:

Answer: short selling  

                                 

Explanation: In simple words, short selling refers to the process in which an individual borrows stock from its holder with the promise of giving it back after a specific time and at a specific price, after borrowing he or she sells the stock at the current market price and expects that the price of stock will decrease in future.

The borrower then purchases the stock at a lower price and gives it back to the lender with the margin profit in his or her pocket. Short selling works like a speculation but only market experts do such activity due to high risk involved.

Such processes are of high value to the market as they result in creation of liquidity.


Related Questions

Timothy Carter went out to eat with his girlfriend at a fancy restaurant. When he tried to pay the bill with his MasterCard credit card, he was told that the restaurant accepted only cash or American Express. His waiter suggested that he use the ATM across the street to withdraw cash using his credit card. Tim did as suggested and didn't pay attention to any fees until he received his credit card statement one month later. He was shocked to see the total fees (3% cash advance), and his APR was increased to 21%. Given the cost of the meal ($125) plus the associated fees, how much did his meal cost him?a. $3.75b.$125 c. $130.94d. $2.19e. $151.25
Economic nationalism called for nations to strike trade deals with other nations coloniesa. True b. False
Nikki loves order and efficiency. She works to make sure that the supply chain is running properly and loves toorganize and track her company's products.Which career path is Nikki most likely in?O Buying and MerchandisingO Distribution and LogisticsO E-MarketingO Management
The importance of management is based upon what
What does the arrow from net income to stockholders' equity signify in a horizontal financial statement, and is it expected to be shown without error?

A computerized cash payments system that transfers funds without the use of checks, currency, or other paper documents.a. electronic funds transfer
b. debit card
c. petty cash slip
d. special endorsement

Answers

A computerised cash payment system that doesn't require checks, cash, or other paper documents to transfer money. electronic funds transfer.

What is document?

A document is a written, drawn, presented, or memorialized representation of thought. Documents are used in a variety of fields, such as business, education, and law, to communicate ideas, share knowledge, and provide evidence. Documents, such as textbooks, reports, and forms, are often used to store and communicate information. Documents can be physical, such as brochures, or digital, such as emails and PDFs. Documents may also include audio recordings, videos, and images. Documents can be stored in many formats, including paper, digital, and microfilm. Document management systems are used to store, organize, and access documents. Document management systems can also be used to track changes, protect documents, and share documents with others.

To learn more about document
brainly.com/question/25534066
#SPJ4

If an individual buys stock on margin and its price rises, the investor?a. must pay up additional collateral
b. must pay tax on the unrealized gain
c. must pay interest on borrowed funds
d. may take delivery of the stock

I took the exam and D was wrong. I believe it is either b or c

thanks

Answers

B, but only when you go to sell - capital gains

You are buying a house that is priced at $200,000. You need to make a 10% down payment, and closing costs will be 5%. Which of the following is/are true? I. The amount of the loan will be $200,000 II. Closing costs will be $10,000 III. Closing costs will be $9,000 IV. You will need to bring $29,000 total to the bank in order to get the loan.

Answers

Answer:

Let's break down the information and check which statements are true:

I. The amount of the loan will be $200,000.

  - This statement is true. The house is priced at $200,000, and you are making a 10% down payment, which means you will be taking a loan for the remaining 90% of the house price. So, the loan amount is $200,000.

II. Closing costs will be $10,000.

  - This statement is not necessarily true. You mentioned that closing costs will be 5% of the house price. To find the closing costs, calculate 5% of $200,000: 0.05 * $200,000 = $10,000. So, the closing costs could be $10,000.

III. Closing costs will be $9,000.

  - This statement is not true based on the information provided. The calculation in statement II shows that closing costs are $10,000, not $9,000.

IV. You will need to bring $29,000 total to the bank in order to get the loan.

  - This statement is true. To calculate the total amount you need to bring to the bank, add the down payment and closing costs: 10% of $200,000 (down payment) + $10,000 (closing costs) = $20,000 + $10,000 = $30,000. So, you will need to bring $30,000 in total to the bank to get the loan.

Therefore, statements I and IV are true, while statements II and III are not necessarily true based on the provided information.

Final answer:

The true statements are: Closing costs will be $10,000 and You will need to bring $30,000 to the bank. The loan amount will be $180,000, not $200,000.

Explanation:

Firstly, for a house priced at $200,000, a 10% down payment would be $20,000 (200,000*0.10). Secondly, closing costs will be 5% of the price, which would amount to $10,000 (200,000*0.05). To calculate the total amount you need to bring to the bank, you add the down payment and closing costs, equalling $30,000.

Therefore, the statements that are true are: The closing costs will be $10,000 and You will need to bring $30,000 total to the bank in order to get the loan.

The statement The amount of the loan will be $200,000 is false because the loan amount will be the home price minus the down payment, or $180,000.

Learn more about Home Buying here:

brainly.com/question/33844560

#SPJ11

Which of these is a Boolean operator?
OR
YES
NO
CANCEL

Answers

The answer is OR.

The three basic Boolean operators are AND, OR, and NOT.

Answer: OR. is correct for plato users!!!!!!

A country that is close to a pure market economy is referred to as a ____ nation

Answers

capitalists nation

practicing capitalism-a way of organizing an economy so that the things that are used to make and transport products are owned by individual people and companies rather than by the government.

Answer:

B

Explanation:

Its simple and correct

When a ________________ exists in a competitive market, buyers want to purchase more of a good or service than is supplied.

Answers

Answer:

excess demand or shortage

Explanation:

this is called excess demand or a shortage. Remember, when excess demand exists, buyers compete more intensely for the amount available

Final answer:

The term that completes the sentence is 'shortage'. In a competitive market, a shortage occurs when the demand for a good or service surpasses its supply. This scenario can materialize due to various causes such as increased demand, production issues or limitations in the market.

Explanation:

When a shortage exists in a competitive market, buyers want to purchase more of a good or service than is supplied. A shortage occurs when the demand for a product exceeds the supply. This condition can be due to various factors such as production problems, increased demand, or market restrictions. An example of this may be the shortage of a popular toy during the holiday season. Manufacturers may not be able to keep up with the increased demand, leading to a scarcity of the toy in the market. As a result, buyers are willing to purchase more than what is available, creating a shortage.

Learn more about Shortage here:

brainly.com/question/32824966

#SPJ11