Finance Seminar - Oliver Randall - University of Melbourne

 

A seminar by Dr Oliver Randall from the University of Melbourne

Title: Liquidity Management by Bond Mutual Funds (joint work with Minsoo Kim)

Abstract: We find that when bond mutual funds have higher redemptions, they liquidate more corporate bonds, but less so if they hold a higher proportion of cash. With larger redemptions, funds tend to liquidate bonds whose transaction costs are lower, and those with worse credit ratings. When redemptions are a larger proportion of cash reserves, we see a pecking order, with cash liquidation less sensitive to redemptions and corporate bond liquidations more so. Liquidity costs increase when other mutual funds are selling the same security, and when those other funds have less cash to meet their own redemptions. 

 

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Details
Start Date
End Date
Venue
Zoom
Presenter(s)
Oliver Randall