Defined-benefit (DB) pension plans are an endangered species; they are perceived as too risky and costly. But the emerging substitute, the defined contribution plan, has many shortcomings. The risk of DB plans can be controlled, first, by modeling the liability in terms of its market-factor...

By defining duration as the sensitivity of an asset's price to changes in some other variable, one may characterize any asset as having an inflation duration, Di, and a real-interest-rate duration, Dr. Unlike nominal bonds, for which Di = Dr, inflation-linked bonds, such as Treasury...

“The trustees of an endowed institution are the guardians of the future against the claims of the present.” –James Tobin, winner of the 1981 Nobel Prize in Economics. Tobin’s thoughtful admonition that endowment trustees should protect the spending power of the endowment for all time...