Estimation for one kind of liquidity risk of open-end funds

The estimation for liquidity risk of open-end funds is a key problem for the fund managers.The paper studies the problem of liquidity risk of open-end funds based on the relations of cash reserve,amount of collecting in the beginning and investment ability of managers for open-end securities by using the stopping time and martingale theory.It shows that the larger the fund amount of collecting in the beginning is,the stronger the ability of meeting the needs of redemption of investors is,i.e.,the stronger the ability of avoiding risk is.It also shows that the amount of inventory for open-end funds cash reserve is in proportion to the investment ability of manager for open-end securities.