What is one criterion for immunizing a single liability?

To immunize a single liability, one key criterion is that the Macaulay duration of the portfolio of assets must equal the investment horizon. This is because matching the duration of assets to the timing of the liability ensures that the portfolio will have the appropriate cash flow availability when the liability needs to be settled. Essentially, by aligning the duration, interest rate risk is mitigated, and the value of the assets will move in a way that offsets changes in the value of the liability due to interest rate fluctuations.

Achieving this balance is critical for effective immunization, as it means that any changes in interest rates will not adversely affect the ability to meet the liability obligations. Ultimately, this strategic alignment allows an investor to safeguard the real purchasing power of the future cash flows needed to satisfy the liability.

Other options present criteria that do not adequately address the specifics of immunization. For instance, simply having the present value of cash flows of assets being equal to liabilities or less than it doesn't consider the timing and interest rate sensitivity necessary for true immunization. Therefore, the core requirement is the equality of Macaulay duration with the investment horizon.