Immunization Strategy

Posted in Finance, Accounting and Economics Terms, Total Reads: 745

Definition: Immunization Strategy

Immunization strategy is one in which securities are included in a portfolio that will offset the risk of any loss due to the already present securities in the portfolio.

Immunization is used mostly in cases where there is a risk of loss due to change in interest rates and hence securities are included in the portfolio that will ensure that their value increases by the same amount as the loss due to the change in interest rates. And thus the overall effect of risk will be negated.

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