Canadian Securities Course (CSC) Practice Exam

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What is the obligation to buy back the stock after selling it short called?

Confirmation

Buy-in

This is because a buy-in is a market convention in which the party that sells a security agrees to buy it back at a later date. This option is incorrect because confirmation refers to a document that acknowledges a legal obligation or order, not to the obligation itself. Convertible preferreds and delayed floater preferreds are types of stocks, not specific obligations related to selling stocks short.

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Convertible preferreds

Delayed floater preferred

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