MATCHING STRATEGY
Acquiring investments by which its payouts will accord an individual or a firm’s liabilities. In this strategy, every investment portfolio is chosen according to an investor’s risk tolerance and pay out requirements. It may comprised of dividends, coupon payments, or principal repayment.
For instance, retirees who are dependent on the income from their portfolio may require continuous and stable payoffs. What the matching strategy would do involves strategically purchasing securities to pay out dividends or interest at regular intervals. A pension would employ the same strategy.
POPULAR TERMS
Mature Economy
An economic situation where the birth rate is stable or lower than mortality rate, as well as the pace of economic growth has slowed down. It is ch ...
Blackberry Addiction
Colloquial term for overreliance or overuse of Blackberry. The smartphone is manufactured by Research in Motion. It is a prevailing condition for s ...
Completed Contract Method - CCM
Accounting method allowing a taxpayer or business to defer reporting of income and expenses until the contract has been completed. Frequently, this ...
Choice Market
Market in which the spread between the bid and ask prices for a particular financial instrument is zero. Meaning the instrument can be purchased fo ...
Rational Pricing
A theory that states the prices that reflect a security’s fundamental value and the absence of arbitrage opportunities.
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