Notes

Immunization offers a stable return on investment, and it also means that there would still be little opportunity to raise the yield of that kind of investment, thus contradicts the goal of management control. Immunization is also the risk mitigation practice of balancing the length of financial assets. This practice lessens the chances of changes in market conditions, which would in turn reduce the capacity for capital depletion. With that being said, through getting liabilities balanced with capital. Since it has features of an active and passive approach, this method is moderately effective. Total immunization ensures that even for a given timeframe, the portfolio is invested for a defined benefit, and without any external interest variables being capable of affecting the yield. In addition, another huge immunization issue is whether the object of the experience and supervision that somehow an intermediary can offer is defeated. Simply choosing coupon rate bonds and combining them with inverse cash flows should be the simplest method of immunization. To accomplish or handle this doesn't really require a strong financial history and is not hard to manage.