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Renting Out Share To Be Shorted - Why?

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Okay, so the institution is receiving a fee for lending out the shares, but this fee must be a lot lower than the shorter expects the shorted stock to fall or there would be no benefit to doing it.

Now, is it just a case of risk versus reward for the lender, or is the fee there effectively to hedge losses that the lender already expects?

Explanations in words of two syllables or less much appreciated.....


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  • 285 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

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