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- 2014-6-28
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confusion on contingent immun
So we want Immunization Yield available in the market > Minimum Acceptable Return in order to create cushion spread.
However if yields go up, we lose value in terms of the bond, so immunization is kicked in.
Maybe I am confusing myself, and I've lost site of two different issues that I am combining as one, but do you want the yield to increase or decrease relative to the minimum acceptable rate? On the one hand it seems like increase leads to cushion spread, on the other it seems like it decreases asset values and kicks in full immunization. |
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