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9. (TCO 3) Volume of short sales represents a contrary opinion rule, because (Po

ID: 2678697 • Letter: 9

Question

9. (TCO 3) Volume of short sales represents a contrary opinion rule, because (Points : 4)
short sellers generally do not know what they are doing.
short sellers tend to overreact.
short sales generate potential demand for stocks.
More than one of the above


10. (TCO 4) There is customarily a small spread between bid and asked prices of Treasury notes and bonds, because (Points : 4)
they are traded at a discount from par.
there is competition from other markets.
the market for Treasury issues is liquid.
there are not many government securities dealers.

Explanation / Answer

short sales generate potential demand for stocks. there is competition from other markets.