Final answer:
The statement that a person who sells a common stock short is betting that its price will fall is true (a). Short selling is a strategy that profits from a stock's price drop as opposed to traditional investing which seeks capital gains through an increase in stock value.
Step-by-step explanation:
When a person sells a common stock short, they are indeed betting that the price of the stock will fall. This is a true statement, so the answer to the question is A) True. Short selling is a trading strategy where an investor borrows shares of a stock they believe will decrease in value, sells them on the open market, and then aims to buy them back later at a lower price. The investor profits from the difference in price, minus any fees or interest paid to borrow the shares. This strategy is contrasted with the traditional method of investing where an investor buys stock with the expectation that its value will increase over time and then sells it at a higher price for a capital gain.