Advantages of Cash Flow Matching and Dedicated Strategies Include ______

question 17

Multiple Choice

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 institution's liabilities often exceed the maturity of available bonds,making cash matching even more desirable

• A) I only
• B) II only
• C) I and III only
• D) I, II and III

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Definitions:

Differential Revenue

The difference in revenue between two alternatives, often used in decision making to understand the financial impact of different choices.

Fixed Costs

Expenses that do not vary with production volume, such as rent and salaries.

Variable Cost

Costs that vary directly with the level of production or sales volume, such as raw materials and labor costs.

Outside Provider

An external entity or organization that supplies goods or services to another business or individual.