2. What risks does PSC want to hedge and what risks is PSC willing to bear? Why?
How would hedge these risks on July 26 using a short-sale strategy? What problems arise with the short-sale strategy?
One of the common investment strategies for Hedge Funds is to leverage those risks that they understand and hedge the risks where they feel they do not have enough expertise. Pine Street Capital specialized in the technological sector. Their competitive advantage lay in their ability to single out performing stocks in the technological sector. On the other hand, they did not feel too comfortable in assessing the movements of the market. As a result, their