NO.PZ2023010410000029
问题如下：
During Juan Pablo Alonso, age 40, is the manager of a national, publicly-funded soccer team located in a country that uses the U.S. dollar (USD) as its currency. This country’s debt is rated AAA. Alonso has a one-year employment contract that has been renewed for several years. He is confident that he can maintain this job, or a similar managing position, until his planned retirement at age 55.
When Alonso retires in 15 years, he plans to purchase a 25-year annuity that pays USD 100,000 after tax annually. He will need USD 1,600,000 at retirement to fund the annuity. Alonso expects the annual payout to be sufficient to meet all his needs on an inflation-adjusted basis. He does not plan to leave any estate at his death.
Five years have passed, and Alonso, age 45, signs a 10-year employment contract, which includes a one-time signing bonus, with a corporate-owned professional soccer club. His annual base salary with this club is higher than his previous salary and is indexed to inflation. Because the club has had financial difficulties in the past, the owner agrees to guarantee Alonso’s salary over the life of the contract. Alonso intends to keep his living expenses unchanged and increase his annual savings.
Alonso still plans to retire at the end of the 10-year contract. Given his improved financial position, he now plans to depend on cash flow from his investment portfolio to meet retirement expenses rather than purchase the 25-year annuity.
Describe one change in Alonso’s circumstances that has decreased his earnings risk and one change that has increased his earnings risk.
选项：
解释：
请老师解答
Debra has a higher correlation between wage growth and risky-asset returns because she is employed in a financial firm and part of her income is based on equity returns. Ignoring salary level differential, Debra’s higher wage growth correlation implies lower human capital as her wages are riskier and thus should be subject to a higher discount rate. Therefore, higher wage growth correlation is a factor that reduces life insurance need.
