# Single Period Immunization

Two step:

1. Duration of Asset = Duration of Liability

2. PVA = PVL

Does it mean Dollar duration A = Dollar duration Liability?

Jep. Point 1.

Jep?

Jep. = Yes. [German slang]

Cool, tks. Learn new thing. But why u said point 1, i thought need to combine two points?

Why combining?

1. DD assets = DD liabilities

2. PV assets = PV liabilities

OR

1. MDUR assets = MDUR liabilities

2. PV assets = PV liabilities

1. DD assets = DD liabilities

2. PV assets = PV liabilities

OR

1. MDUR assets = MDUR liabilities

2. Market value of assets = Market value of liabilities

3. PV assets = PV liabilities

Shouldn’t be point 2 and 3 the same?

Yes, what I mean is you need to have both 1 and 2 holds.

1. MDUR assets = MDUR liabilities

2. PV assets = PV liabilities

Then you can have DD assets = DD liabilities

(I thought u mean point 1 is we can bypass point 2?)

I think we always need both points, but point 1 could be either DD or MDUR.

1. PV of assets = PV of Liabilities

2. The Composite duration of the portfolio =The composite duration of Liabilities

3. The distribution of durations of Individual portfolios ASSETS must have a WIDER range than the distribution of the LIABILITIES.

I always thought that this point is only a need in MULTIPERIOD immunization?

Got it. Now i understand ur point. Cheers.

It’s mutiple-laibility immunization approach?