Canadian Securities Course (CSC) Practice Exam · Question
When can an investor engage in short selling within a cash account?
Short selling must always occur in a margin account because it involves borrowing securities and carries unlimited risk, requiring collateral and specific regul
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Question: When can an investor engage in short selling within a cash account?
Answer options: ✅ Never
- Only if the shares are borrowed immediately
- If the investor has sufficient funds to cover potential losses
- With specific permission from the investment dealer
Correct answer: Never
Explanation: Short selling must always occur in a margin account because it involves borrowing securities and carries unlimited risk, requiring collateral and specific regulatory oversight.
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