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JaeJoon Han
 
''Adequate Liquid Provision for a Run Preventing Contract''
( 2011, Vol. 31 No.4 )
 
 
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.
 
 
Keywords: liquidation cost, fund run, illiquid investment, liquid investment
JEL: G2 - Financial Institutions and Services: General
E4 - Money and Interest Rates: General
 
Manuscript Received : Feb 04 2011 Manuscript Accepted : Oct 21 2011

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