Asked by Elyssa Arcibal on Jul 05, 2024

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Cash flow matching on a multiperiod basis is referred to as

A) immunization.
B) contingent immunization.
C) dedication.
D) duration matching.
E) rebalancing.

Cash Flow Matching

A form of immunization, matching cash flows from a bond portfolio with those of an obligation.

Immunization

A strategy in fixed income investing that aims to make a portfolio's duration and interest rate risk match its liability obligations.

Duration Matching

An investment strategy where the durations of assets and liabilities are aligned to reduce the risk of changes in interest rates affecting the net worth.

  • Understand the principle of immunization and its role in managing bond portfolios.
  • Acquire knowledge on how to calculate and apply duration in the context of bond portfolio immunization and liability alignment.
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Samantha EsquivelJul 12, 2024
Final Answer :
C
Explanation :
Cash flow matching on a multiperiod basis is referred to as dedication. This strategy involves matching cash flows from a portfolio with anticipated cash outflows, effectively ensuring that the portfolio can meet its future liabilities.