Explain how they approach the estimation of discount rates


Problem

Skim the paper "Public Pension Promises: How Big Are They And What Are They Worth?" by Robert Novy-Marx and Josh Rauh (Journal of Finance, 2011).

In skimming, focus on the big picture and pay attention to how their exercise relates to both the forecasting of cashflows and the estimation of discount rates.

• In words, explain how they approach the estimation of discount rates?

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Finance Basics: Explain how they approach the estimation of discount rates
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