easy · Frm Part 2 Risk & Investment Management
Which of the following describes the 'shadow cost' of an illiquid asset allocation?
- The total dollar amount of management fees paid over the life of the investment.
- The difference between the reported NAV and the estimated fire-sale value.
- The regulatory capital surcharge for holding Level-3 assets.
- The rising economic cost of being unable to rebalance or fund consumption as liquidity needs increase.
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