An approach to the management of bond portfolios involves choosing portfolios with a duration that matches the duration of liability cash flows.

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An approach to the management of bond portfolios involves choosing portfolios with a duration that matches the duration of liability cash flows,and thus immunises these cash flows from changes in interest rates.This approach ensures sufficient cash flows to meet liabilities when they fall due.As with cash matching,the cash flows may be modelled as either certain or uncertain (that is,stochastic).

An Approach to the Management of Bond Portfolios Involves Choosing