Question 294 short selling, portfolio weights
Which of the following statements about short-selling is NOT true?
(a) Short sellers benefit from price falls.
(b) To short sell, you must borrow the asset from person A and sell it to person B, then later on buy an identical asset from person C and return it to person A.
(c) Short selling only works for assets that are 'fungible' which means that there are many that are identical and substitutable, such as shares and bonds and unlike real estate.
(d) An investor who short-sells an asset has a negative weight in that asset.
(e) An investor who short-sells an asset is said to be 'long' that asset.
Copyright © 2014 Keith Woodward