Multiperiod immunization(redirected from Multi Period Immunization)
An immunization strategy in which one matches the duration of bonds in a portfolio to the duration of one's liabilities. Duration is the number of years until the investor receives the present value of all income from a bond (including interest and principal), and is used to gauge a bond's sensitivity to interest rate changes. A multiperiod immunization strategy is intended to reduce the portfolio's sensitivity to interest rates; that way, the return on the portfolio will enable the holder to pay for his/her liabilities regardless of fluctuations in interest rates. See also: Duration matching strategy.