Accounting/Actuarial Bias Enables Equity Investment
- Topics:
- Stock Options
- Tags:
- Earnings,
- Equity,
- Equity Investment,
- Finance,
- Financial Services,
- Investment,
- Pension Research Council
- Source:
- Pension Research Council
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Overview: "Defined benefit pension plans earnings (expense) are computed using actuarial methods and economic assumptions that systematically anticipate expected equity returns and strongly dampen the volatility of actual equity returns. Thus, corporations whose plans invest in equity overstate the financial value of their earnings and understate the volatility of such earnings."
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Format: PDF | Size: 255KB | Date: Mar 2001 | Pages: 58
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