This case study examines the importance of liquidity to the financial markets, extreme volatility in the flow of funds in 2008, as an example. While the case is directed to MBA students to an investment or portfolio management course is also suitable for advanced undergraduate courses. It is written from the perspective of a fund manager that has experienced significant redemptions in 2008 and is considering whether to use the “liquidity provision” reflux Management Service LLC. ‘S Case, students should consider the nature and magnitude of the transaction costs of investment funds, how funds flow may induce additional trade and how innovative reflow attempts to solve these problems. Through this analysis, students better understand what is on the term “liquidity” and how liquidity, or lack thereof, can have a negative impact on the performance of the portfolio.
by
Richard B. Evans,
Michael Mills
Source: Darden School of Business
12 pages.
Date Posted: August 24, 2009. Prod #: UV2560-PDF-ENG
Mutual Funds flow and liquidity management solution cases of reflux, LLC
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