Cash flows come from coupons and liquidating bond portfolio positions.
why this is wrong for Cash flow matching?
Cash flows come from coupons and liquidating bond portfolio positions.
why this is wrong for Cash flow matching?
You shouldn’t be liquidating positions if the cash flows are matched. You are trying to exactly match your liability cash flow needs with the timing of the bond coupons and maturities.
By “liquidating bond portfolio positions” do you mean receiving the principal at maturity, or do you mean selling the bonds before maturity?