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Discounting [5]

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Bullet points include: Actuarial work often analyses future cash flows, both assets and liabilities Present values and discounted cash flows summarise future cash flows in today’s terms, although some “information” lost hence e.g. stochastic projections Discounting and hence discount rates are key to this process Particularly for financial transactions E.g. purchase, sale or surrender of an (insurance) product such as an annuity or life policy; transfer value or cash withdrawal from a DB pension scheme; splitting of pension assets on divorce; takeover or merger of a company (with or without a DB pension scheme); purchase or sale of investments (including equities, bonds and real estate); comparison of remuneration benefits and costs; etc Or where such a financial transaction would provide a benchmark

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