14. Under the social security system in the United States, workers pay taxes and receive a monthly...
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14. Under the social security system in the United States, workers pay taxes and receive a monthly annuity after retirement. Some have argued that the United States should invest the social security tax proceeds in stocks. The rationale is that, over time, there is a decreasing probability that stocks will underperform bonds. The social security system would thus benefit from the higher expected return on stocks.
Making use of the put-pricing discussion in Section 6, comment on this proposal.
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Derivatives Markets Pearson New International Edition
ISBN: 978-1292021256
3rd Edition
Authors: Robert L. Mcdonald
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