CFA Practice Question

There are 275 practice questions for this study session.

CFA Practice Question

Randy Smith called his broker, Pam Durbin, and asked her to borrow 100 shares of Zylex Corp. stock. Randy then sold the stock at the current market price of $45 while anticipating that Durbin would be able to buy the stock back for him at a lower price in the future. What type of order did Smith place?
A. Margin order
B. Short sale
C. Special order
Explanation: The objective of a short sale is to borrow securities, sell them at the current market price, and then replace them with the same securities purchased at a lower price.

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