Research by Aragon (2007)indicates that lock up restrictions on redemptions and positive serial correlations of returns indicate that hedge funds often face __________ problems.

Question

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Lock up restrictions on redemptions and positive serial correlations of returns indicate that hedge funds often face liquidity problems. Lock up restrictions limit an investor's ability to withdraw their money from the hedge fund, which could make it difficult for the fund to meet redemptions if too many investors try to cash out at the same time. Positive serial correlations of returns can also indicate that the fund is invested in illiquid assets, which can make it difficult to sell those assets in a hurry if needed.

Research by Aragon (2007)indicates That Lock Up Restrictions on Redemptions