[1Old Pro]

“Investment income” is one thing, Old Pro, but that differs markedly from the risk-free returns that Treasuries afford the saver, and those that cannot afford even short term volatility on the principle.

Treasuries principal varies and would decline in a rising interest rate environment thus providing liquidity at a cost of principal loss. The interest might be risk free, not principal unless the holder waits until maturity. For liquidity the often used strategy employed would be a bond laddering approach.

[MichaelCorleone]

Duration.

Pension funds and insurance companies time their investment so that they can redeem the bond at par.

When the bond matures, it is redeemed at par regardless of market conditions.