Which of the Following Statements Regarding the Short Interest Ratio

question 76

Multiple Choice

Which of the following statements regarding the short interest ratio is true?

• A) It is derived as total shares sold short divided by total shares outstanding.
• B) It indicates the dollar amount needed to cover all short positions.
• C) The higher the ratio, the more bullish investors are.
• D) It is derived as number of shares sold short divided by average trading volume.

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Definitions:

Future Cash Flows

Expected cash receipts and payments a business anticipates receiving or paying out over a future period.

Bias

A preconception or inclination towards something, potentially leading to unfair judgments or decisions in various contexts.

Incremental Overhead

The additional indirect costs incurred due to a change in business activities, such as an increase in production volume.

Income Taxes

Taxes levied by a government directly on income, especially an annual tax on personal or corporate earnings.