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Why is the risk tolerance for a DB pension fund high? Why is the liquidity need low for the same?
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Why is the risk tolerance for an endowment fund high? Why is the liquidity need low for the same?
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Why are liquidity needs high for a mutual fund? Is it the case for closed end funds also?
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Why is liquidity need high for life insurance cos?
Because it has an extremely long time horizon.
It isn’t always low; it depends on the number of active workers vs. the number of retired workers.
Because it has an extremely long time horizon.
Because apart from the required spending (I think it’s 5%), they don’t have to spend money if they don’t want to.
Because they need cash on hand to redeem shares.
Closed funds don’t redeem shares, so not for them.
Because they don’t know when people are going to die.
Wonderful! Thanks 