Asset allocation liquidity constraints

CFA Level III
#1

Liquidity constraints are when we need to have enough cash in hand to make our payments without selling any of our positions to raise cash

Contributions are cash we have in hand+ the various asset produces cash income so that’s cash in hand. So contributions+ cash income = liquidity. However, then I noticed that in one of the mocks, the cash that we have in our asset allocation is somehow subtracted to get our liquidity requirements. Why is that?

#2

Would be better if you could provide the question.

#3

You already have the cash.

They’re asking how much more liquidity you need your portfolio to generate.

1 Like
#4

thanks, magician!

#5

My pleasure.