Edited by author 10-09-2005 01:21 PM
Students should be allowed to sell Futures in their career earnings
All sorts of weird problems and possibilities arise from this. First, do you really mean "futures"? More likely you mean the net present value of future expected income and cumulative asset value of the individual. This gives you a nice figure to conjure with. Musicians like David Bowie and Rod Stewart have created a new class of bond, the "Bowie Bond" (http://www.bowiewonderworld.com/bowienews/news0399.htm), but these bonds commoditise the known value of an existing back catalogue. Closer to the concept is some kind of swap, but the problem here is that pricing swaps relies on having a very tight (and calculable) arbitrage relationship with the forward and forward forward markets (or having a proxy equivalent which you can calculate forward/forward forward rates from, like FRAs for interest rate/currency swaps), something which I can't quite see how you'd construct around an individual's future income.