Investing: Long and Short Positions Quiz
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Questions and Answers

What does a long position represent?

  • A strategy to maximize losses.
  • Ownership in a security. (correct)
  • A type of investment in derivatives.
  • A method of short selling.

    • What must an investor do to close a long position?

  • Sell the stock in the market. (correct)
  • Hold the shares for a longer period.
  • Buy more shares.
  • Transfer the shares to another account.

    • Which scenario describes a short position correctly?

  • An investor holds onto their shares for future gains.
  • An investor sells securities they do not own. (correct)
  • An investor buys shares on margin.
  • An investor sells securities they own.

    • What is required from an investor when initiating a short position?

    <p>They must make an additional margin deposit.</p> Signup and view all the answers

    How does an investor close a short position?

    <p>By buying back the stock from the market.</p> Signup and view all the answers

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