Explanation:
The liquidity duration statistic (LDS) gives us the time required to liquidate a position. It can be computed as:
| Security | Days to Liquidate |
|---|---|
| P | days |
| Q | days |
| R | days |
| S | days |
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Q.2523 A portfolio manager is looking to reduce the holdings of four different securities in their portfolio due to liquidity risks. The following table provides information on each security:
| Security | Market Value (CNY million) | Shares in Fund | Average Daily Trading Volume | Max Daily Volume for Liquidation (%) |
|---|---|---|---|---|
| P | 100.00 | 400,000 | 600,000 | 25 |
| Q | 180.04 | 450,000 | 1,200,000 | 15 |
| R | 75.88 | 300,000 | 650,000 | 20 |
| S | 35.80 | 550,000 | 900,000 | 22 |
Which security will require the most number of days to liquidate fully, given the restrictions?
A
Security P
B
Security Q
C
Security R
D
Security S
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