I am confused as to why we need less life insurance when there is a higher growth wage correlation. I mean if my wages are increasing, don’t we need to have more life insurance because of this increase?
Correlation between wages and . . . what?
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risky assets returns
Higher correlation of returns means higher volatility, higher risk, higher discount rate, lower present value, lower human capital.
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gotcha
thank you a lot
My pleasure.
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