1. Regarding short selling: which one of the following statements is incorrect?
   1. Dividends on any stock sold short must be covered by the short seller.
   2. There is no time limit on a short sale.
   3. Short sales are permitted only on falling prices or a downtick.
   4. Short sellers must put up margin as if they had gone long.
2. Which one of the following is not a reason why indexing works?
   1. Indexing has tax advantages.
   2. Securities markets are not efficient.
   3. Indexing is cost efficient.
   4. Funds incur heavy trading expenses.

PLEASE ANSWER BOTH AND THANK YOU!!!