Question: The liquidity problems in managed funds are different from those faced by commercial banks and insurance companies? Discuss the above statement briefly and explain how

  1. The liquidity problems in managed funds are different from those faced by commercial banks and insurance companies?

  1. Discuss the above statement briefly and explain how does the liquidity risk of an open-end managed fund compare with that of a closed-end fund?

  1. Discuss briefly why deposit insurance can decrease bank run and how can this scheme lead to a moral hazard problem.

(4 marks)

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