Canadian Securities Course (CSC) Practice Exam · Question
When an investor sells shares short, they are speculating that the price of the shares will:
Short selling involves borrowing and selling shares, with the expectation of buying them back later at a lower price to profit from the decline. Therefore, a sh
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Question: When an investor sells shares short, they are speculating that the price of the shares will:
Answer options:
- Increase ✅ Decrease
- Remain stable
- Become highly volatile
Correct answer: Decrease
Explanation: Short selling involves borrowing and selling shares, with the expectation of buying them back later at a lower price to profit from the decline. Therefore, a short seller is speculating on a price decrease.
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