What is the usual action taken by an investor who is short-selling a stock?

When an investor is short-selling a stock, they sell shares that they do not currently own with the expectation that the stock's price will decline. The key to short selling is that the investor borrows the shares from another party, typically a brokerage, and sells them on the open market. If the stock price does indeed drop, the investor can then repurchase the same number of shares at the lower price, return them to the lender, and pocket the difference as profit.

This strategy is built on the premise of capitalizing on falling prices, making option C the correct choice. Other actions such as buying stock expecting prices to rise or selling stock they own with the same expectation understand the opposite market dynamic and do not fit the mechanics of short selling. Holding onto stocks indefinitely does not involve either selling or the anticipatory tactics of short selling.