Q7(i). Discuss how a portfolio of assts could b constructed to match liabilities? The answer from ASET is about pure matching. Would I get any points if I give answer around how to construct a asset liability model? Or alternatively, if i use chapter 28 - Portfolio construction and benchmarking to produce answer. Will I get any points? thanks
The answer to this is never just jump in the deep end having read a question only once. The issue here is to achieve matching so need to find assets that have the same features as the liabilities. Your alternatives are on the peripherals of the question so may get a mark but not much more
