ARTÍCULO
TITULO

Liquidity Constraint for Portfolio Selection Models

Gabriel Matos Pereira    
Leonardo Riegel Sant'Anna    
Tiago Pascoal Filomena    
João Luiz Becker    

Resumen

Liquidity is an important issue in portfolio management. In 2012, the Brazilian market regulatory agency (CVM) started to require all banks and brokerages to maintain liquidity control of their portfolios. This study presents a liquidity constraint which is endogenously incorporated to portfolio optimization to Brazilian Financial Institutions. The proposed constraint incorporates endogenously some practical issues such as: portfolio value, monetary volume traded, maximum percentage of monetary value, liquidation term date and liquidation level. This constrain is applied to the Brazilian Stock Market. The selected constraint parameters have high influence on the liquidity level of the portfolio.

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