12. On August 8 of this year, Brent sold 500 shares of ADO stock for $24...
12. On August 8 of this year, Brent sold 500 shares of ADO stock for $24 a share. On September 6 of this year, he purchased 500 shares of ADO stock to cover his position. The transaction on August 8:
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was a short sale.
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was a margin trade.
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was a wrap transaction.
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created a long transaction.
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was a pooling transaction.
Homework Answers
Answer to this question is that it was a short sale.
In short sale, shares are borrowed by seller and sold out at the market price. Then they re-buy those shares at a much lower price and return them to the lender.
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