immunization

im·mu·nize   (ĭm'yə-nīz')    tr.v.   im·mu·nized, im·mu·niz·ing, im·mu·niz·es To render immune. To produce immunity in, as by inoculation. Law To grant immunity from prosecution: immunize a witness. im'mu·ni·za'tion (-nĭ-zā'shən) n.

immunization

The process of inducing immunity, usually through inoculation or vaccination.

Note: Frequently, schoolchildren are required by state law to be immunized against certain diseases. Because of such widespread immunization, many diseases that used to be fairly common, including smallpox, tetanus, and whooping cough, have become rare.

Immunization

A strategy that matches the durations of assets and liabilities, thereby minimizing the impact of interest rates on the net worth.

Investopedia Commentary

For example, large banks must protect their current net worth, whereas pension funds have the obligation of payments after a number of years. These institutions are both concerned about protecting the future value of their portfolios and therefore have the problem of dealing with uncertain future interest rates. By using an immunization technique, large institutions can protect (immunize) their firm from exposure to interest rate fluctuations. A perfect immunization strategy establishes a virtually zero-risk profile in which interest rate movements have no impact on the value of a firm.

Also known as multiperiod immunization.

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See also: Duration, Interest Rate, Reinvestment Risk, Risk

immunization

A technique of investing in bonds such that the portfolio's target return is protected against interest rate fluctuations. Changes in returns at which cash flows can be reinvested are offset by changes in the value of the securities in the portfolio. See also bullet immunization.

Main Entry: im·mu·ni·za·tion
Variant: also British im·mu·ni·sa·tion /"im-y&-n&-'zA-sh&n/
Function: noun
: the creation of immunity usually against a particular disease <immunization against smallpox>; especially : treatment of an organismfor the purpose of making it immune to subsequent attack by a particular pathogen

immunization

process by which resistance to disease is acquired or induced in plants and animals. This discussion focuses on immunization against infectious diseases in vertebrate animals, specifically humans.

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