Question on who couldn’t make as much alpha or something like that. believe answer was long only. and then who might have to unwind positions, i think it was whatever company had the highest leverage, i believe the right choice was the one with 2:1 leverage. Sound right?
agreed on both accounts.
I disagree with both answers here personally. First one, it was asking which one is most likely not allowed due to IPS constraints, I chose the one with 2:1 leverage ratio. Second one, which one is most likely to get liquidated prematurely? I chose the one with 1M account size with 200 holdings, 5000 per account and long-short, the most likely one to liquidate positions with margin call.
agree. Long only. Some funds are prohibited to short. agree. 2:1 leverage. In the event of a downturn, margin calls will come faster for the more highly leveraged fund.
"Long only. Some funds are prohibited to short. " Just as you said, if a lot of funds have constraints on short, Long-only is most likely allowed, not NOT allowed in the question.
Long only is the one who would suffer most…can’t short.