Advantages of cash flow matching and dedicated strategies include:
I. Once the cash flows are matched, there is no need for rebalancing.
II. Cash flow matching typically earns a higher rate of return than active bond portfolio management.
III. Financial institutions' liabilities often exceed the maturity of available bonds, making cash matching even more desirable.

Question

Quizplus · Accepted Answer

Once cash flows are matched, there is generally no need for rebalancing, making it a key advantage of cash flow matching.

Advantages of Cash Flow Matching and Dedicated Strategies Include