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Short Sale Problem What's a short sale? What might happen with respect to short sales and market efficiency? What is an investors profit or loss

Short Sale Problem

What's a short sale? What might happen with respect to short sales and market efficiency? What is an investors profit or loss when he shorts a stock at $40 and it appreciates to $60; depreciates to 20%? What does the potential distribution of profits and losses look like for any short sale?

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