Immunization of Bonds | CA Final SFM (New Syllabus) Classes & Video Lectures

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Investment in bonds cannot be considered completely risk free. Such investment can have the following two types of risk:
- Interest Rate Risk
- Reinvestment Risk
Interest Rate Risk:
- Such risk arises when interest rate prevailing in market increases.
- This will cause an increase in the expectation for the bond holder.
- As a result, the discounting rate i.e. DYR increases and the present value of bond decreases.
Reinvestment Risk:
- Such risk arises when interest rate prevailing in market decreases.
- As a result, the bond that is currently held will have increase in its value.
- However, once the bond is redeemed, the investor gets the redemption price in hand.
- The investment of such amount cannot be made at the earlier coupon rate and the reinvestment will be at a lower rate resulting into reduced income for the investor.
Immunization of bond is a process of creating a bond portfolio through which the interest rate risk and reinvestment risk can be either eliminated or minimized.
Note:
Immunization cannot be achieved through single bond and creating a bond portfolio is necessary for immunization.

[@TheAsterix909]

Your explanation is very lucid and to the point. Pls continue doing these lessons. I am not a CA but need these for MBA Finance

[@vaibhavverma9151]

This is one of the best explanation of this topic I've seen on TH-cam so far..
Thankyou so mich sir!
I highly appreciate your efforts.

[@NikhilJobanputra]

You are most welcome dear

[@capawansaini1139]

In Nov 2018 SFM 12 mark question on bond immunization..
Thanku sir

[@CAHarenRathod]

Thank you so much !
Sum starts here 16:03
(If you know the concept)

[@abhishekagrawal1129]

Today I came to know logic behind dis concept.
Thanks a lot sir for explaining in such an easy n best way....
Isse better ho hi nii sakta....

[@NikhilJobanputra]

It's my pleasure

[@mizansiddiqui3779]

You Make concepts crystal clear 🙏

[@cadurgaprasad3804]

Sir your teaching style is so lucd. Thanks for explaining 😍

[@poonammaurya3470]

Sir any video for forward rates calculation of bonds?

[@CANikhilSir]

I shall upload that very soon... I like when the audience demand.

[@jahnavisannidhi9137]

You are just amazing sir....
Please provide in english also sir.

[@nehayadav5524]

Sir by heart amazing 🙏 explaination

[@urmiyadav4825]

Straight forward video ❤

[@manoharsharma5481]

Nice way to explain sir

[@aryanaggarwal2127]

Remarkable explanation 💯

[@kunikaagarwal9674]

Thank you so much sir, your way of teaching is so understandable....

[@NikhilJobanputra]

Thanks Kanika, Glad to have your comments. Please stay tuned to my channel

[@kunikaagarwal9674]

Sir plz make a video on bond duration....

[@NikhilJobanputra]

I have uploaded a video on Bond Duration already, long back
th-cam.com/video/KvNhuOtNej8/w-d-xo.html

[@kunikaagarwal9674]

Okay sir

[@sakibpatel2865]

Thank you so much sir for your irrevocable support....❤️

[@thecharteredworld]

Thnx alot sir

[@va2883]

Sir investment amount ki present value consider ki jayegi kya agar q me kd given hai to.

[@deepaligandhe9091]

You are amazing sir... You have completely made my concept crystal clear... Thank you very much 🙏🙏

[@mohdtajuddin2182]

Sr post videos on equity valuation methods

[@myplaf7895]

Thanks a lot sir ! So much love and respect from Nepal.

[@lithingowda1106]

The way you teach is awesome 👌👌

[@debangshulahiri4204]

Sir agar non cumulative bond kharida jae to fir immunization ki jarurat hogi?

[@himanshugupta6025]

Sir really this video is superb......🙌

[@NikhilJobanputra]

Thanks Himanshu

[@rkprajapat1565]

Thank u sir ji ...
Your teaching style is very nice...

[@CADIVYANSHUJAIN]

Really awesome revision 🙏🙏🙏🙏

[@CADIVYANSHUJAIN]

In today scenario, immunization meaning is much more clear

[@harishanurag8446]

Sir, but even one bond is there due to Market interest rate fluctuations cant we immunize the Bond ?

[@NikhilJobanputra]

Hi Harish,
For immunization, it is compulsory to create a Bond Portfolio. Single Bond cannot achieve this objective.

[@TanujEconomicsClasses]

Thanks sir best teacher for sfm

[@utkarshsharma4403]

Thanku so much sir. You made this topic very easy for me.😊😊😊😊😊

[@NikhilJobanputra]

You are welcome, Utkarsh

[@lallilalli2601]

Super an Thank u soo much sir...

[@kushaldevadiga9940]

Tendulkar of SFM! ❤

[@_Arif__]

Thank you sir.

[@dr.umadeviveggalam1239]

super lecture sir
Thank you

[@calovesharma3301]

Good to learn Sir.. Thnsk
Pls provide a Example based on Variable Growth Rate in Sec. Valuation Chptr.

[@NikhilJobanputra]

Yes, very soon the video shall be uploaded.

[@sachinpk6]

Sir 1 Question:if we have liability of 10 lakh after 4 years, and have 4 bond zero coupon bond options - 1)Bond with 1yr maturity 2)Bond with 5 Yr maturity 3) ) Bond maturity same as liability 4) Combination of 1st and 2nd Bond.
How can we rank them as best option and why?

[@YD7306]

Very helpful

[@rubymathias16]

Sir we will have to invest the present value of the bond right ? Then while calculating the number of bonds why is the maturity value taken and divided by current market price???

[@NikhilJobanputra]

Dear Ruby,
We certainly have to invest the present value of the bond and not the maturity value. The same concept is given in the video as well. May be you need to go through the video once again.

[@nishasharawat2750]

Great sir

[@mrugayapatil]

Hello Sir, I have a doubt . while immunizing 2 bonds A and B as mentioned in video , we have to take duration of one bond greater than 1 year and another bond less than 1 year in order to achieve target duration of on an average of 5 years. So if we take duration of 5 years for both the bonds the average would be exactly 5 years , then why aren't we considering duration of investment for both the bonds as same i.e. 5 years ?

[@PriyaSharma-of3sy]

I think that's coz the rate of bonds will be same if the period is same too, so we won't be able to immunize
rather it would be like investing in the same security twice.
Don't know if I'm correct but that's what I think the assumption should be.

[@mrudulsankhesara6940]

Thank you so much sir for these videos...can you please add corporate valuation chapter video..basic one..i couldn't attend the lecture..it would atleast give me an idea to solve the sums..

[@CANikhilSir]

Sure. by next week, I shall upload the same.

[@mrudulsankhesara6940]

@@CANikhilSir thank you so much sir..

[@mohdtajuddin2182]

Sr post videos on portfolio theory

[@prajwalbhumbar7584]

Thankyou so much sir!1 CA final student for May-2026

[@caderickmachado]

Applicable for old course too?

[@NikhilJobanputra]

Certainly Yes...!

[@ekanshagarwal9176]

Thank you sir😊😊😊

[@dattuyadavalli3091]

Thank you sir very good explanation

[@sakshijaidka8330]

Thank u sir!

[@AkshayKumar-ep5qd]

Super 🔥

[@khursidansari7968]

Nice

[@studyclub4854]

He is superb yr❤️❤️❤️

[@ruchimishra584]

Very nice🤗

[@akashbavishi6615]

Tomorrow is my mid sem exam and i m here for mba finance exam😅

[@igrok878]

what is the language he speaking? Impossible to understand.

[@nagajothim4337]

sir ur classes ar ereally understandable .can u please explain in english?

[@capawansaini1139]

How we solve for more than 2 bond portfolio

[@NikhilJobanputra]

That has to be done in the same way with a little additional working. My books and Complete Videos cover these concepts.

[@anishajain8103]

Immunization from corona bhi bata do sir ;)

[@jym5754]

Sir ,Can pls u teach in English

[@NikhilJobanputra]

Yes Definitely...!!!
For Complete English Lectures, Please call at 7400448022

[@vikashmaheshwari5208]

Thank you sir

[@reluctanteconomist3780]

Thank u G

[@mohdtajuddin2182]

Sr post videos on equity valuation methods

[@NikhilJobanputra]

Yes Md. Tajuddin,
Very soon. Please do let me know whether you are CA/CFA/CMA Student. Thanks