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Observations on the Paper by Mr. Jellicoe, published in No. XXII. of this Journal*
Published online by Cambridge University Press: 18 August 2016
Extract
Take first the case in which. A has not a life interest, but one for n years, remainder to B. Let P be a sum of consols, 100–δ the present price of consols; consequently, P consols sells for
cash, which may be called M; A's and B's shares of it being M1 and M2.
B has a right to a sum of P consols n years hence: it matters not to him how this sum arises, provided it be ready for him in n years’ time. Suppose such a sum now appropriated to accumulate for n years as will produce P, B will be in the same position as if A enjoyed the sum intermediately; and if such sum be now handed over to B he will neither gain nor lose. Supposing M2 to be this sum, M2 invested to accumulate for n years = P consols.
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- Copyright © Institute and Faculty of Actuaries 1855
References
page 211 note * “On the Valuation of Property held for Life and in Reversion; and on the due Apportionment of it, when so held on the same Life, between the Tenant for Life and the Remainder-man.”
page 212 note * As the discussion of a subject generally serves to throw light upon it, we have inserted this paper of Mr. Wilbraham's; but it will, we think, be seen at once that the reasoning in it is altogether erroneous. Mr. Wilbraham confounds the rate of interest which the purchaser of a security, under certain limitations, may reasonably expect to make, with the rate which the security without such limitations may be yielding—the two having of course no connection. Mr. Jellicoe's paper goes to show how a surplus property, created simply by the circumstance that two proprietors concur to sell, should be disposed of: without such concurrence the surplus would have no existence.—Ed. A.M.
page 215 note * On the contrary, the sum in every case must be less, no matter what the security.—ED. A. M.