AFM 121 Quiz section 1

AFM 121 Quiz section 1 - In a short position the value of...

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What are the primary differences between fixed icome and money market financial instruments? Fixed income: sold at face value; require regular interest payments; less liquid Money market: sold at discount or face value; typically don’t require interest payment; more liquid 2. a. short selling is significantly more risky than purchasing shares. Why is this the case?
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Unformatted text preview: In a short position, the value of the position increases as the value of the borrowed (sold short) asset decreases. As there is no theoretical limit to how high an asset value may rise, losses are theoretically infinite. b. what is a margin account? A brokerage account in which securities can be bought and sold short on credit....
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