Figure 2 shows the value over time of an initial investment in equities and bonds (with income reinvested) and i. i. d. returns.
We have chosen a model that only includes equities and cash to avoid the problems that arise when the benchmarks considered present multicollinearity.
Given that insurers are among the largest institutional investors in equities, this is not an unreasonable claim.
The findings support the view that aging may lead to increased risk aversion and thus to a lower engagement of institutional investors in equities.
I assume that equities will not be held in respect of pensioners' benefits, so no adjustment is needed here.
The graph shows the worker's annual earnings, asset holdings, consumption, and asset mix between equities and bonds.
Proposition 1. * l 0 that is, all assets in the new mandatory account are in ested in t equities.
Meanwhile, unlike traditional policies, variable policies imply active investment in equities, real estate and international investments which may be expected to keep pace with inflation.
