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ABC is a hypothetical clothing company in malls. Due to fall in mall traffic during pandemic, there is skepticism amongst investors on its future performance. 30 million ABC shares were sold short of its 50 million shares outstanding. ABC share price fell from $20 to $5. The marketing campaign of ABC that switched its retail model from offline to online worked unexpectedly well. ABC's shares jumped to $22. Despite the increas in price, some investors reported a loss. What would be the possible cause? a. Short squeeze Ob. The investors have adopted a buy-and-hold strategy O c. High expected volatility O d. Long position closed out prematurely

ABC is a hypothetical clothing company in malls. Due to fall in mall traffic during pandemic, there is skepticism amongst investors on its future performance. 30 million ABC shares were sold short of its 50 million shares outstanding. ABC share price fell from $20 to $5. The marketing campaign of ABC that switched its retail model from offline to online worked unexpectedly well. ABC's shares jumped to $22. Despite the increas in price, some investors reported a loss. What would be the possible cause? a. Short squeeze Ob. The investors have adopted a buy-and-hold strategy O c. High expected volatility O d. Long position closed out prematurely

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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ABC is a hypothetical clothing company in malls. Due to fall in mall traffic during pandemic, there is skepticism amongst investors on its future performance. 30 million ABC shares were sold short of its 50 million shares outstanding. ABC share price fell from $20 to $5. The marketing campaign of ABC that switched its retail model from offline to online worked unexpectedly well. ABC's shares jumped to $22. Despite the increase in price, some investors reported a loss. What would be the possible cause? a. Short squeeze O b. The investors have adopted a buy-and-hold strategy O c. High expected volatility O d. Long position closed out prematurely
Transcribed Image Text:ABC is a hypothetical clothing company in malls. Due to fall in mall traffic during pandemic, there is skepticism amongst investors on its future performance. 30 million ABC shares were sold short of its 50 million shares outstanding. ABC share price fell from $20 to $5. The marketing campaign of ABC that switched its retail model from offline to online worked unexpectedly well. ABC's shares jumped to $22. Despite the increase in price, some investors reported a loss. What would be the possible cause? a. Short squeeze O b. The investors have adopted a buy-and-hold strategy O c. High expected volatility O d. Long position closed out prematurely
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