Carhart, Mark MKaniel, RonMusto, David KReed, Adam V2023-05-222023-05-222002-01-012016-06-15https://repository.upenn.edu/handle/20.500.14332/34373We present evidence that fund managers inflate quarter-end portfolio prices with last-minute purchases of stocks already held. The magnitude of price inflation ranges from 0.5 percent per year for large-cap funds to well over 2 percent for small-cap funds. We find that the cross section of inflation matches the cross section of incentives from the flow/performance relation, that a surge of trading in the quarter's last minutes coincides with a surge in equity prices, and that the inflation is greatest for the stocks held by funds with the most incentive to inflate, controlling for the stocks' size and performance.This is the peer reviewed version of the following article, which has been published in final form at http://dx.doi.org/10.1111/1540-6261.00438. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Self-Archiving.FinanceFinance and Financial ManagementArticle