Description: The author proposes the concept of a risk-free equivalent rate of return on shareholders' equity, or ‘REROSHE,’ as a means of helping business managers make decisions involving risk. The author defines REROSHE as ‘that certain return on an investment of u that will generate the same expected value of utility as will earnings on a line of business supported by surplus u.’ Includes discussion and author’s review of discussion. From Transactions of Society of Actuaries 1983 Volume 35.

Description: If a stock life insurance company is to continue to be an attractive vehicle for stockholder investment, adequate recognition must be given to the importance of the basic economic concept of return on stockholder equity. This Actuarial Note discusses return on stockholder equity as it relates to a life insurance company and is intended to stimulate further thinking in this area. From Transactions of Society of Actuaries 1969, Vol. 21, Pt. 1, No. 59 AB.