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Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
A strategy of matching assets to future liabilities. That is, price immunization involves investing in certain securities with a certain expected return so that the investor will be able to pay for future liabilities. Pension funds and annuities use price immunization more than many investors because they have future liabilities that are both large and relatively easy to estimate. Portfolios that practice price immunization usually invest in low-risk, investment-grade securities. See also: Portfolio dedication.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved