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Offsetting the Incentives: Risk Shifting, and Benefits of Benchmarking in Money Management

Basak, Suleyman et al.
NYU Faculty Digital Archive · Papers
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multidisciplinary
Money managers are rewarded for increasing the value of assets under management, and predominately so in the mutual fund industry. This compensation scheme gives the manager an implicit incentive to exploit the well-documented positive fund-flows to relative-performance relationship by manipulating
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