Abstract
How to increase the amount of pension is a major concern for many retirees. In this paper, the question of whether retirees need to buy out their pensions is examined. Two portfolios are set up and their Sharpe rates are compared under two assumptions. The purpose of the study is to effectively assist retirees in their asset allocation. In this paper, diversified assets from four different sectors were selected to construct the portfolios. Three methods, the mean-variance model, CAPM model, and FF3F model, are used in this paper for portfolio construction and comparison. Meanwhile, the performance of the portfolios was analyzed using the weighting analysis method. The results show that "Disney" has the largest share when it chooses to buy out its pension and reinvest it using the CAPM model, while "LVMH" has the largest share in all other cases. This study may be useful for retirees who are faced with the decision of whether to buy out their pensions.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
