tailieunhanh - Liquidity risk and incentive compensation in open-ended funds

In this paper the principal-agent models between the investor and the manager of the open-ended fund are made from the new view about the liquidity risk management, and the optimal contracts and optimal policies are obtained in closed form by solving these modes. By the analysis of the optimal contract, we find that the fixed compensation of manager is the positive relationship with redemption ratio of investors and the inverse relationship with the growth ratio of total assets; the liquidation of risk assets is the positive relationship with redemption ratio and the inverse relationship with the growth ratio of total assets; the origin risk investing ratio is the positive relationship with redemption and the inverse relationship with the cumulative net growth rate. | Liquidity risk and incentive compensation in open-ended funds