A review of the actuaries' capitalisation rate from an economic perspective

Turner, Jason Edward (2006) A review of the actuaries' capitalisation rate from an economic perspective. Masters thesis, Rhodes University.

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Abstract

The purpose of this paper was to evaluate if the macroeconomic change that has occurred in the South African economy since the 1980s has been significant enough to justify a re-examination of the actuaries’ capitalisation rate, due to its formulation processes dependence on the macroeconomic situation. The need for the reexamination arises from the use of the capitalisation in the calculation of lump sum awards where even a small change in the rate can have a significant impact on the value of the final award. In order to address the issue an examination of how Keynesian expectations are formulated and an examination of the Government’s macroeconomic policy was conducted to provide the foundation. On this foundation, a trend analysis of the major groups of financial instruments, as well as the current outlooks for the South African economy, was conducted to determine if there was any indication of a significant change in the macroeconomic conditions. The results of the analysis provided a compelling case for the urgent need for the actuaries’ capitalisation rate to be recalculated to account for the changed economic situation.

Item Type:Thesis (Masters)
Additional Information:A thesis submitted in partial fulfillment of the requirements for the degree of Master of Commerce (Financial Markets)
Uncontrolled Keywords:actuaries’ capitalisation rate, macroeconomic conditions, Keynesian economics, South African economy 1980s, South African economic policy
Subjects:Y Unknown > Subjects to be assigned
Divisions:Faculty > Faculty of Commerce > Economics and Economic History
Supervisors:Mather, Dinty (Dr.)
ID Code:263
Deposited By: Rhodes Library Archive Administrator
Deposited On:14 Jul 2006
Last Modified:06 Jan 2012 16:17
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