which cash flow strategy has lowest cost to fund liabilities? A basic cash flow B combination match C symmetric cash flow
B Anything with immunization is going to be cheaper than cash flow strategy as the immunization portfolio can be fully invested while the cash flow portfolio has to have set maturities.
I’m going with B since I know A is not correct and have no clue what C is.
bpdulog Wrote: ------------------------------------------------------- > I’m going with B since I know A is not correct and > have no clue what C is. C is just a cash flow matching for multiple liabilities.
yah B,
answer is B combination match comblines the best of immunization and cash flow for most curvature of yield curves is often at the short end. In most cases cash flow matching will be inferior to immunization. symmetric casg flow allows for short term borrowing of funds and it also reduce the cost of funding a liability.
don’t remember these terms at all, anyone have the reading and page #?
Should be Book 4, Fixed Income 1. I am guessing somewhere between page 40 and 50, it was close the end of the chapter. I don’t have the books in front of me.
reading 28