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AT THE END of 2000, current and former employees of the energy trading company Enron Corporation held 2. 1 billion in the firm's 401 (k) retirement savings plan. Sixty-two percent of that money was invested in Enron stock, then trading at 83 a share. In October 2001 Enron's finances began to unravel as its accounting improprieties came to light. Enron stock plummeted over the next several weeks, and on December 2, 2001, the company declared bankruptcy, rendering its shares worthless. Thousands of Enron employees lost their jobs and a large fraction of their retirement wealth simultaneously.
Choi et al. (Sat,) studied this question.