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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?

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

What is pair trading?

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) Signup and view all the answers

What is short selling?

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) Signup and view all the answers

What is plain short selling?

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

What is momentum short selling?

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

What is event-driven short selling?

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

What is pair trading?

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) Signup and view all the answers