Jamie considers to engage in some short-selling activities. What is true about short-selling a stock? (a)...

Jamie considers to engage in some short-selling activities. What is true about short-selling a stock?

(a) The cash position of the short-seller stays the same.

(b) The cash position of the short-seller increases.

(c) The cash position of the short-seller decreases.

Expert Solution

Cash postion is portion of a trades investment in cash

Short selling is selling stocks without owning it we enter contract to buy later

As there is no cash movement there will be no change in cash postion

So option A is correct

jeff jeffy answered 2 years ago

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