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