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 Ohio, students are required to provide written proof by the first day of school of being immunized by rules set forth by the Ohio Department of Health.
The DMCA, while often criticized for being abused by intellectual property rights holders, immunizes ISPs in the US for being legally liable for the copyright infringement of their users.
In 2015, only 25 percent of newborns in the country were immunized for polio and measles, one of the lowest rates in the world.
As in Brazil, Nigeria’s plan requires cash-transfer beneficiaries to fulfill two conditions: keep their children in school and immunize them.
Today, the partnership has immunized 2.5 billion children worldwide.
Perhaps the Cabinet has work to do with the president to immunize him against his political advisers on this crucial national-security issue.
No president has been criminally prosecuted, and the Constitution may even immunize a sitting president from criminal liability, though that theory has not been tested in court.
His persona is still insulated by his deeds, his misjudgments immunized by his youth.
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
Definition of immunize for English Language Learners
: to give (someone) a vaccine to prevent infection by a disease
IMMUNIZE Defined for Kids
Definition of immunize for Students
: to make immune especially by vaccination
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