Risk Taking by Mutual Funds as a Response to Incentives

Judith Chevalier () and Glenn Ellison ()

Working papers from Massachusetts Institute of Technology (MIT), Department of Economics

Abstract: This paper examines the agency conflict between mutual fund investors and mutual fund companies. Investors would like the fund company to use its judgment to maximize risk-adjusted fund returns. A fund company, however, in its desire to maximize its value as a concern has an incentive to take actions which increase the flow of investment.

Keywords: RISK; FINANCIAL MARKET; INTERNATIONAL FINANCE; INVESTMENTS (search for similar items in EconPapers)
JEL-codes: G10 G11 G12 G20 G24 (search for similar items in EconPapers)
Date: 1996
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Related works:
Working Paper: Risk Taking by Mutual Funds as a Response to Incentives (1995)
Journal Article: Risk Taking by Mutual Funds as a Response to Incentives (1997)
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