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Learn best practices for managing liquidity risk in investment funds through this 45-minute educational video covering FRM Part 2 Book 5, Chapter 17. Master the potential challenges fund managers encounter when handling liquidity risk in fixed-income portfolios, including data modeling complexities and regulatory considerations. Explore various approaches to model asset liquidity, with detailed coverage of modeling techniques for infrequently traded bonds and the t-cost model for calculating corporate bond transaction costs. Discover extraordinary regulatory measures available to funds facing unexpected redemption requests and understand the specific circumstances when each measure may be implemented. Examine comprehensive approaches to manage and model redemption risk, including the redemption waterfall methodology, techniques for modeling a fund's redemption-at-risk levels, and strategies to optimize liquidity for meeting redemption demands. Gain practical insights into mortality tables, premium calculations, financial ratios, moral hazard concepts, adverse selection principles, and the distinctions between defined benefit and defined contribution plans, all explained through clear examples designed to enhance understanding of financial risk management principles.
