dyga

janakisri Wrote:
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> Unless you know with absolute certainty the exact
> dates of cash flow liability requirement , it
> would be hard to match the asset-liability flows
> to leave nothing on the table at all times.
>
> With the focus on keeping the cash available when
> it is going to be required to meet the spnding
> requirement, it would be almost impossible to plan
> ahead for the longer term flows. Hence it would be
> technically inferior to immuniztion . Keeping cash
> on hand would lower the net rate of return and
> lower the duration unnecessarily.
>
> Combo or horizon matching attempts to match cash
> flow only in the near term when flows are known
> more precisely , and immunization for longer terms
> , when the exact opposite it true

Plausible story, now I understand. Thanks janakisri!

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