Chapter 20 Flashcards
1
Q
Liability hedging
A
Where assets are chosen in such a way as to perform in the same way as liabilities
2
Q
Advantages of cashflow matching using bonds and swaps
A
Maturity
Liquid
Transaction
Geared
OTC
3
Q
Disadvantages of cashflow matching using bonds and swaps
A
Costly
Margin
OTC
Counterparty
Basis risk