One way for an investor to protect themselves when selling a stock short is to
A) not make the sale on margin.
B) buy an offsetting amount of the same shares coincident with the short sale to perfectly hedge the transaction.
C) issue a stop buy limit order at a price somewhere above the short sale price.
D) An investor cannot protect against large losses in a short sale transaction.
Answer: C
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Mrs. Sharp, the owner of a restaurant, induced the Morissons to buy the business by a misrepresentation; the invoices made her costs appear less than they actually were, and thus her profits more than they actually were. On these facts, which of the following is false?
A) The cause of action could be for the tort of deceit, if there was evidence that Mrs. Sharp intended to deceive them. B) The court could not award the equitable remedy of rescission if evidence showed that Mrs. Sharp really believed the invoices were accurate. C) The court could award the equitable remedy of rescission if the evidence showed she had fraudulently misrepresented the costs. D) The court could terminate the contract for breach of contract if the accurate statement of costs and profit were essential terms of the contract. E) The court could not award the equitable remedy of rectification because the argument is not about rectifying an erroneous written version of a previous oral contract.
A business makes a cash payment to a supplier for office supplies that were purchased earlier on account. Which of the following accounts is debited?
A) Cash B) Accounts Payable C) Office Supplies D) Utilities Expense