Interest Rate Markets Quiz 8: Difference between revisions
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{ Dedication (i) }: a __________ portfolio is one in which the assets are chosen such that their cash flows exactly match those of the liabilities. | { Dedication (i) }: a __________ portfolio is one in which the assets are chosen such that their cash flows exactly match those of the liabilities. | ||
{ | { Immunisation (i) }: The main emphasis in on matching present value and modified duration rather than actual cash flows. | ||
{ Horizon } { matching }: is commonly used as a mixture of the above approaches where only cash flows which are only known with reasonable certainty to a point are matched. | { Horizon } { matching }: is commonly used as a mixture of the above approaches where only cash flows which are only known with reasonable certainty to a point are matched. | ||
{ Indexed } { funds }: Historical data shows that fund managers in general, over a number of years, have had difficulty outperforming broad bond indices. | { Indexed } { funds }: Historical data shows that fund managers in general, over a number of years, have had difficulty outperforming broad bond indices. |