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

Also known as "multiperiod immunization".

Investopedia Says:
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.

Related Terms:
Dedicated Portfolio
Duration
Interest Rate
Reinvestment Risk
Risk

• Cost Basis
• Cost-Benefit Analysis
• Cost, Insurance and Freight (CIF)
• Cost, Insurance and Freight (CIF)
• Cost Of Acquisition
• Cost Of Capital
• Cost Of Carry
• Cost Of Debt
• Cost Of Equity
• Cost Of Funds
• Cost Of Goods Sold (COGS)
• Cost Of Goods Sold (COGS)
• Cost Of Living Adjustment (COLA)
• Cost Of Savings Index (COSI Index)
• Cost Of Tender
• Cost Per Click (CPC)
• Cost Per Click (CPC)
• Cost Per Gross Addition (CPGA)
• Cost Per Thousand (CPM)
• Cost Per Thousand (CPM)
• Cost-Push Inflation
• Cost Synergy
• Coterminous
• Council of Economic Advisors (CEA)
• Council of Economic Advisors (CEA)