What do you mean by asset liability managemnt?

Question

Accepted Answer

Asset liability management is the practice of managing risks that arise due to mismatches between assets and liabilities.

Asset liability management involves managing the risks associated with the assets and liabilities of a company or organization.
It aims to ensure that the assets are sufficient to cover the liabilities and meet the organization's financial obligations.
Strategies used in asset liability management include hedging, diversification, and matching the duration of assets and liabilities.
Example: A bank using asset liability management to ensure it has enough liquid assets to cover customer deposits.
Example: An insurance company using asset liability management to match the duration of its investments with the expected payout of claims.

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