The paper presents a model of retirement plan enrollment, under the presence of a default asset portfolio, in which consumers have a propensity to procrastinate and risk preferences are heterogeneous. The model is based on Caroll et al (2005), but instead of the savings rate, the agent optimally...

Many financial instruments are designed with embedded leverage such as options and leveraged exchange traded funds (ETFs). Embedded leverage alleviates investors' leverage constraints and, therefore, we hypothesize that embedded leverage lowers required returns. Consistent with this hypothesis,...

Warren Buffett has consistently advised investors to follow a simple approach, diversifying broadly and minimizing costs. In fact, he recommended the trustee that will manage his wife's bequest to stick to a simple 90-10 stock-bond portfolio. Is this a sensible strategy for retirees in general?...

The global financial crisis affected also Polish pension market. Low or negative rate return on pension capital accumulated in Open Pension Funds led to social disappointment and growth of feeling of social insecurity. Prolonged financial crisis together with sluggish economic growth forced...

Using a simple sign test, we report new empirical evidence, taken from both the US and the German stock markets, showing that trading behavior substantially changed around Black Monday in 1987. It turned out that before Black Monday investors behaved more as in the momentum strategy; and after...

Pooled annuity products, where the participants share systematic and idiosyncratic mortality risks as well as investment returns and risk, provide an attractive and effective alternative to traditional guaranteed life annuity products. While longevity risk sharing in pooled annuities has...