The integration of insurance and taxes in corporate pension strategy

Article Abstract:

Corporate pension strategies with regard to taxation and insurance are examined to determine optimality in terms of asset allocations and funding. In particular, the strategies known as 'mini-max'and 'maxi-min' are evaluated. The analysis indicates that interior pension strategies, rather than the extreme corner strategies represented by either mini-max or maxi-min, are the most beneficial when capital market imperfections and shareholder interests are considered. In the discussion following the pension strategy analysis, the research is credited with admirably summarizing the regulations contained in the Employee Retirement Income Security Act of 1974, although the application of strategy evaluation models to these regulations is questioned.

United States, Taxation, Corporate taxes, Pension funds

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An economic analysis of interest rate swaps

Article Abstract:

One relatively recent financial investment technique is interest rate swaps. Swaps are effective in liability management and as a hedging technique against interest rate changes over the terms of the investment. A method for analyzing interest rate swaps from an economic and financial standpoint is pursued. The analysis lends itself to valuations of interest rate swaps. When investment horizons are longer than two to three years, interest rate swapping is more effective as a hedge than is either financial futures or financial options.

Methods, Management, Conferences, meetings and seminars, Liabilities (Accounting), Economic aspects, Finance, Hedging (Finance), Interest rates, Corporate finance, Interest rate swaps, American Finance Association

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A note on optimal credit and pricing policy under uncertainty: a contingent claims approach

Article Abstract:

A model is developed which integrates wealth maximization with pricing and credit policy decisions made under uncertain conditions. The model extends the policy analysis to include uncertainties about consumers' liquid assets and product demand. Pricing and credit policies are shown to be interdependent, and the joint credit-pricing decision is interpreted as a contingent claim.

Models, Risk (Economics), Pricing, Credit, Mathematical optimization, Optimization theory, Uncertainty, Financial research

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