臺大管理論叢 NTU Management Review VOL.29 NO.2

To study the of impact of inflation on the cost of inflation-linked annuities (such as the old-age benefits under the Labor Insurance Act in Taiwan), Chen, Yang, and Huang propose an inflation-linked annuity with a cap and floor model where interest rate risk and inflation risk are considered. The proposed model is very general that it can be reduced to special forms such as ordinary annuities and inflation-linked annuities without barriers. The numerical results indicate that the prices of the annuities with cap and floor generally increase when the cap values increase and that the sensitivities of volatilities are larger than those of the correlation coefficients. The final special issue paper by Yang provides an estimation model for evaluating the impact of changing military officers’ minimum time in grade and maximum time in service on pension payments. Based on Alam’s (1985) steady state career structure model, the author first constructs a Modified Steady State Career Structure Model (MSSCSM). Combining the MSSCSM with manpower costs of each grade, Yang next establishes an Estimation Model for Military Officers Future Pension Payment (EMMOFPP). The policies’ parameters can be then inputted into the EMMOFPP to estimate the impact of these policies on the future pension payment for new retired officers every year. The numerical results suggest that the extensions of service time for retirement in Field Grades and Major General, and the extensions of time in grade for promotion in Company Grades will increase most ranks’ promotion prospects. For example, the promotion prospect of major to lieutenant colonel is increased from 52.8% to 55.9%. However, the future payment of the officers’ retirement pension has been increased, rather than decreased, by 0.29%. Since the knowledge of tax-planning strategies and experience in implementing tax- planning strategies can be shared among firms via their network ties, the last article by Huang examines the relationship between board interlocks and corporate tax avoidance. Following Brown and Drake (2014), this study shows that a firm’s tax avoidance behavior is related to its directorate ties to low-tax firms. Moreover, the result suggests that the influence of board interlocks on tax avoidance depends on certain characteristics of the firm’s ties. The empirical results of this study can help explain part of the observed variation in corporate tax avoidance.