CIA Study note

[oscar peterson]

Okay, what does it mean to manage a long duration liability cash flow in the 'total rate of return segment', as a risk management issue for interest rate risk (according to the CIA). Always forgetting that one on list #2367......Thanks.

[ACCtuary]

To the best of my knowledge, it means don't worry about matching this segment to any particular liability - just shoot for the moon (relative to your organizations risk tolerance, of course) You don't have to worry about immunization or any other interest rate strategy for this segment.

You simply wish to maximize the market value of the assets backing this section since you don't have to sell them any time soon.