maxmeomeo

I agree with Leo_land on the reinvestment risk. ( But the schwser answer says otherwise. The answer says BOTH arguments are CORRECT)
On the capital requirement side, shouldn’t both immunization and cash flow strategies require the same amount of capital=pv(liability). Although cash flow needs better time match, whereas immunization only requires the average amount of capital to be equal, not the distribution patter? Why one is higher in term of capital requirement?