The most appropriate description of the strategy that Haley suggests in his Statement #3 is to create a portfolio that:
A. has cash flows concentrated around the horizon date.
B. is duration matched but uses cash flow matching in the later years of the liability schedule.
C. is duration matched but uses cash flow matching in the initial years of the liability schedule.
Ans: C. is duration matched but uses cash flow matching in the initial years of the liability schedule.
Business
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