Question from TIA/3

Quote:

Which of the following are reasons an investor might short-sell? 1. Speculation 2. Financing 3. Hedging

The solution says that all three are acceptable reasons to short sell. I'm a bit dubious at reason (2). Why would an investor use short selling to finance when it's incredibly risky? Wouldn't it be better to finance using debt?



If the investor uses short-selling to finance because they feel that it's a cheaper option (i.e. the price will go down), doesn't that count as speculation?

Question from TIA/3