Reading 27: Fixed-Income Portfol....anagementPart I－LOS k

multiple, contrast, liability, single, class

CFA Institute Area 8-11, 13: Asset Valuation
Session 8: Management of Passive and Active Fixed Income Portfolios
Reading 27: Fixed-Income Portfolio ManagementPart I
LOS k: Compare and contrast immunization strategies for a single liability, multiple liabilties, and general cash flows.

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tycoon

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发表于 2008-9-15 14:37 | 只看该作者

Which of the following CORRECTLY describes cash flow matching for a single liability? Cash flow matching involves:

A)	selecting a bond with the same duration as the liability.

B)	buying and selling bonds in a way to match the cash flows of a liability.

C)	selecting a bond with a present value equal to the present value of the liability and with the same maturity.

D)	selecting a bond whose cash flows coincide exactly with the payments of the liability.

Answer and Explanation

Cash flow matching is matching up the cash flows from a bond to fund a liability stream so that the asset value of the bond is zero after the last liability is paid.

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tycoon

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发表于 2008-9-15 14:38 | 只看该作者

Which strategy for funding multiple liabilities uses a process for selecting bonds that have cash flows that correspond to those of the liability stream?

A)	Cash flow matching.

B)	Combination matching.

C)	Multiple liability immunization.

D)	Contingent immunization.

Answer and Explanation

The cash flow matching strategy for funding multiple liabilities uses a process for selecting bonds that have cash flows that correspond to those of the liability stream.

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deqiang

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发表于 2011-5-10 23:35 | 只看该作者

thanks.

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Reading 27: Fixed-Income Portfol....anagementPart I－LOS k

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