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LOS k: Compare and contrast immunization strategies for a single liability, multiple liabilties, and general cash flows.
Q1. Which of the following CORRECTLY describes cash flow matching for a single liability? Cash flow matching involves:
A) selecting a bond whose cash flows coincide exactly with the payments of the liability.
B) selecting a bond with a present value equal to the present value of the liability and with the same maturity.
C) selecting a bond with the same duration as the liability.
Q2. 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) Multiple liability immunization.
B) Cash flow matching.
C) Combination matching. | 
发表于 2009-3-6 09:09
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