Question: Which statement bellow is true regarding the difference between short selling the underlying asset and entering a short position in a forward contract on the

Which statement bellow is true regarding the difference between short selling the underlying asset and entering a short position in a forward contract on the same underlying asset?

Short selling the underlying asset does not require an initial cash flow.

Short selling through a forward does not require an initial cash flow.

Short selling the underlying asset involves daily mark to market.

Short selling through a forward involves daily mark to market.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!