Are You a Short Selling Pro?
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Questions and Answers

What is short selling?

  • A trading strategy where an investor holds onto shares of a stock for a long period of time
  • A trading strategy where an investor borrows shares of a stock from a broker and sells them on the open market with the expectation that the stock price will decrease (correct)
  • A trading strategy where an investor buys shares of a stock with the expectation that the stock price will increase
  • A trading strategy where an investor invests in a stock with the expectation that the company will pay high dividends

What is plain short selling?

  • A strategy that seeks to profit from specific events that may negatively impact a company's stock price
  • A strategy that involves identifying two related stocks and taking a long position on one while simultaneously taking a short position on the other
  • The simplest form of short selling, where an investor borrows shares, sells them, and hopes to buy them back at a lower price (correct)
  • A strategy that focuses on identifying stocks that are experiencing significant upward momentum but are believed to be overvalued

What is momentum short selling?

  • The simplest form of short selling, where an investor borrows shares, sells them, and hopes to buy them back at a lower price
  • A strategy that focuses on identifying stocks that are experiencing significant upward momentum but are believed to be overvalued (correct)
  • A strategy that seeks to profit from specific events that may negatively impact a company's stock price
  • A strategy that involves identifying two related stocks and taking a long position on one while simultaneously taking a short position on the other

What is event-driven short selling?

<p>A strategy that seeks to profit from specific events that may negatively impact a company's stock price (B)</p> Signup and view all the answers

What is pair trading?

<p>A strategy that involves identifying two related stocks and taking a long position on one while simultaneously taking a short position on the other (B)</p> Signup and view all the answers

What is short selling?

<p>A trading strategy where an investor borrows shares of a stock from a broker and sells them on the open market with the expectation that the stock price will decrease (A)</p> Signup and view all the answers

What is plain short selling?

<p>A trading strategy where an investor borrows shares, sells them, and hopes to buy them back at a lower price (C)</p> Signup and view all the answers

What is momentum short selling?

<p>A strategy that focuses on identifying stocks that are experiencing significant upward momentum but are believed to be overvalued (D)</p> Signup and view all the answers

What is event-driven short selling?

<p>Traders employing this strategy seek to profit from specific events that may negatively impact a company's stock price (C)</p> Signup and view all the answers

What is pair trading?

<p>A strategy that involves identifying two related stocks and taking a long position on one while simultaneously taking a short position on the other (B)</p> Signup and view all the answers

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