Examples of immunize in a Sentence
Many people had to be immunized after being exposed to the disease.
Recent Examples of immunize from the Web
In 2006 rulemaking, the commission choose to immunize content that is posted online for free from regulation.
John Wisely/Detroit Free Press Common vaccines administered to millions of children every year could be put on trial next month in Oakland County in a parental dispute over whether to immunize a 2-year-old.
Parents of infants and all people who live with an infant or who provide care to an infant should also be immunized.
One of the things the Trump people have done very well is immunize their supporters against any bad news.
More than 19,000 people, including 7,300 at-risk individuals, have been immunized with hepatitis vaccinations.
Scientific evidence supporting an absolute need to immunize against meningitis B still falls short.
An administration that cared about the people of Puerto Rico would reject this request – and immunize the island from these shipping restrictions permanently.
Anyone sitting at home with the anonymity of a laptop should be very clear that that will not immunize them from arrest, prosecution, and prison.
These example sentences are selected automatically from various online news sources to reflect current usage of the word 'immunize.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.
First Known Use of immunize
Financial Definition of IMMUNIZE
What It Is
How It Works
To understand the immunization strategy, first remember that although bond prices fall when interest rates rise, the rate at which the investor can reinvest his coupon payments increases (the opposite is also true: when rates fall, prices rise but the reinvestment rate falls). For example, let’s assume an investor purchases a $10,000 bond at par. The bond has a 10% coupon paid semiannually and matures in three years. If market yields stay at 10%, the following would occur at the end of the first two years:
As the table shows, the investor would receive $2,000 in coupon payments, which he would reinvest as he receives them at the market rate of 10% per year, earning him another $155. When the coupons and the interest on interest are added to the bond principal, the accumulated value of his investment is $12,155, for a 10% annual return.
Now consider what happens if market yields increase, say to 15%, right after the investor purchases the bond.
The higher reinvestment rate increased the amount of interest the investor earned on the coupon payments. However, the price of the bond fell more than enough to offset this gain. The net result was a decrease in total return. Now compare this to what would have happened if reinvestment rates fell to 8% instead.
In this example, the low reinvestment rate reduced the interest earned on the coupon payments. But the bond price rose, offsetting some of this loss. The net result was an increase in total return. Thus, the yin-yang relationship between interest rates and bond prices also creates a tradeoff between reinvestment risk and interest rate risk.
The trick to immunization therefore is to find bonds where the change in interest on interest exactly offsets the change in price when rates change. This can be done by setting the duration of the portfolio equal to the investor’s time horizon and making sure the initial present value of the bond equals the present value of the liability in question. In our previous example, we assumed the investor intended to hold the bond for two years, presumably because he intends to use the money to fund some obligation. Thus, to immunize the portfolio, the investor should set the duration to two years. Six months later, the investment horizon will be 1.5 years, and the investor should rebalance the portfolio’s duration to equal 1.5 years, and so on. The intended result: an income portfolio that has an assured return for a specific time horizon regardless of changes in interest rates.
Why It Matters
A dedicated-portfolio strategy, and immunization in particular, is most appropriate when an investor needs to fund a future liability. When executed well, it can provide terrific returns (and tremendous peace of mind) to investors. But immunization is not without risks. It requires investors to calculate and time future liabilities, which isn’t always easy or accurate. Immunization also assumes that when interest rates change, they change by the same amount for all types of bond maturities (this is called a parallel shift in the yield curve). This, of course, rarely happens in the real world and it therefore makes duration matching more difficult. Thus, the immunization strategy does not ensure the expected return when interest rates change (this deviance is called immunization risk).
One way to control immunization risk is to invest solely in zero-coupon bonds that have maturities matching the investor’s time horizon. Portfolios with high immunization risk, on the other hand, include high-coupon securities that mature at regularly spaced intervals over the course of the portfolio’s time horizon (this is called laddering). This constant maturing means frequent reinvestment, which means a high sensitivity to changes in interest rates and thus high immunization risk.
IMMUNIZE Defined for English Language Learners
IMMUNIZE Defined for Kids
legal Definition of immunize
- the ultimately ill-fated effort to immunize state judges from the burdens of the federal income tax
- —J. K. Owens
immunizationplay \ˌi-myə-nə-ˈzā-shən\ noun
Seen and Heard
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