Financial Risk Manager Part 2
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A hedge fund manager is concerned about a potential increase in investor redemptions and wants to assess the effects of such an event on the fund's liquidity. The manager asks a junior analyst to estimate the average number of days required to liquidate certain securities in the fund. The analyst uses the information presented below to make this estimation for four securities:
| Security | Market value of security in the fund (CNY million) | Shares of security in the fund | Average daily trading volume of security | Maximum daily volume allowed for liquidation (expressed as a percentage of average daily trading volume) |
|---|---|---|---|---|
| A | 93.00 | 500,000 | 522,000 | 22% |
| B | 173.04 | 420,000 | 1,328,000 | 12% |
| C | 58.88 | 256,000 | 710,000 | 18% |
| D | 28.80 | 640,000 | 848,000 | 20% |
Which of the four securities listed above is expected to take the longest to liquidate?