Adequate Liquid Provision for a Run Preventing Contract

We extend Ross and Cooper (1998) and find an adequate liquidate provision as a function of liquidity cost in CRRA (Constant Relative Risk Aversion) environment. Our study shows that a RPC (run preventing contract) in a MMMF (money market mutual fund) requires a higher amount of liquidity provision when the capital loss becomes greater in a credit crunch period.

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Year of publication:	2011
Authors:	Han, JaeJoon
Published in:	Economics Bulletin. - AccessEcon, ISSN 1545-2921. - Vol. 31.2011, 4, p. 2986-2995
Publisher:	AccessEcon
Subject:	liquidation cost \| fund run \| illiquid investment \| liquid investment

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Extent:	application/pdf
Type of publication:	Article
Language:	English
Classification:	G2 - Financial Institutions and Services ; E4 - Money and Interest Rates
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10009324132