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Pastimes : Ask Mohan about the Market -- Ignore unavailable to you. Want to Upgrade?

To: Haim R. Branisteanu who wrote (7446)	11/8/1997 2:12:00 PM
From: Mark Nelson	Read Replies (1) \| Respond to of 18056

<mutual funds have established credit lines from commercial banks to pay redemption in case of big market moves.> So, theoretically, say Mutual Fund XYZ has no cash. The market drops and Haim Q. Public calls to redeem his holdings. XYZ borrows the $ to pay Haim and unloads the holdings the next day. The market slips and XYZ gets clocked again. The holdings that they needed to sell from yesterday's redemption are down 5%. Who is going to eat that 5%? Mark