Cash-Flow Matching: Buying Bonds to Fund Planned Expenses
This lesson is part of the course
In this lesson
You work backwards from the last expense to find the face value of the bond to buy for each year, so that coupons plus maturing principal cover every payment, and price the whole portfolio.
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Lessons in this course
- Designing a Ladder: Rungs, Equal Amounts & Maturity Years Locked
- Annual Coupon Income & the Maturity Schedule Locked
- Weighted Average Maturity & Yield of the Ladder Locked
- Rolling the Ladder: Reinvestment at New Rates (Chart) Locked
- Cash-Flow Matching: Buying Bonds to Fund Planned Expenses Locked
- Barbell vs Ladder vs Bullet: Income and Duration Locked
- Inflation & Real Income: Nominal Ladder vs Inflation-Linked Bonds Locked
- Ladder vs Bond Fund: Price Sensitivity with Duration Locked