Risk Premiums, Risk-Adjusted Excess Returns and Health Care Premiums

2012 ◽  
Author(s):  
Vichet Sum
Keyword(s):  
Health Care ◽  
Excess Returns ◽  
Risk Premiums

Risk Premiums versus Waiting-Options Premiums: A Simple Numerical Example

2009 ◽  
Vol 9 (1) ◽  
Author(s):  
Kenji Miyazaki ◽  
Makoto Saito
Keyword(s):  
Risk Aversion ◽  
Interest Rates ◽  
Excess Returns ◽  
Intertemporal Substitution ◽  
Informative Signal ◽  
Risky Assets ◽  
Risk Premiums ◽  
Numerical Examples ◽  
Numerical Example ◽  
New Information

This paper investigates how interest rates on liquid assets and excess returns on risky assets are determined when only safe assets can be used as liquid assets when waiting for an informative signal of future payoffs. In particular, we carefully differentiate between a demand for liquid assets while waiting for new information and a demand for safe assets for precautionary reasons. Employing Kreps--Porteus preferences, numerical examples demonstrate that larger waiting-options premiums (lower interest rates) emerge with higher risk aversion in combination with more elastic intertemporal substitution.

Presidential parties, monetary regimes, and health care returns

2015 ◽  
Vol 41 (10) ◽  
pp. 1059-1076 ◽  
Author(s):  
Jeffery Scott Bredthauer ◽  
Brian C. Payne ◽  
Jiri Tresl ◽  
Gordon V. Karels
Keyword(s):  
Health Care ◽  
Monetary Policy ◽  
Political Party ◽  
Health Care Industry ◽  
Entire Period ◽  
Excess Returns ◽  
Policy Regime ◽  
Content Type ◽  
Care Industry ◽  
The Us

Purpose – The purpose of this paper is to investigate the absolute and risk-adjusted stock return performance of the US health care industry conditional upon the presidential administration’s political party and the Federal Reserve’s monetary policy stance. It evaluates this return behavior across the 60-year time period from 1954 to 2013, and sub-divides this entire period into the pre-Medicare period (1954-1964), Medicare period (1965-1984), and Medicare-plus-high-health-care-inflation period (1985-2013). Design/methodology/approach – The study uses monthly returns to the health care industry and overall market, characterizing each sample month as either having a Republican or Democratic president and either a contractionary or expansionary monetary policy regime determined by whether the Federal Reserve is increasing or decreasing interest rates, respectively. It incorporates univariate and multivariate analysis to quantify the return behavior of both the health care industry and the overall market during the entire period and all three sub-periods. Additionally, it utilizes a common four-factor multivariate regression model and associated hypothesis testing to characterize risk-adjusted excess returns (i.e. α) to the health care industry during the entire period and all three sub-periods. Findings – The health care industry has earned robust, positive risk-adjusted returns with the magnitude of the returns sensitive to the political party of the administration and the monetary policy regime. The authors find that prior to 1965 (1954-1964), when the president was a Republican, during times of monetary contraction, health care earned an excess risk-adjusted return. There was no association between Democratic administrations and excess health care returns prior to 1965. In contrast, the authors find that after 1965 this relationship changes. The authors find that returns to health care were positive for Republicans during times of monetary expansion and positive for Democrats during monetary contraction. The authors also find this relationship has become more pronounced after 1984. Originality/value – The study extends prior literature, which has shown that the health care industry is a priced factor in the US stock market and that it provides significant risk-adjusted returns in the recent past. Uniquely, this study shows that the excess returns to health care vary considerably over the past 60 years, and that these excess returns are quite sensitive to political policy, proxied by the presidential administration party, and monetary policy, as measured using Fed discount rate changes. These findings have implications for management and shareholders of highly regulated and subsidized industries and firms.

scholarly journals Acquisitions And Common Stock Returns In The Health Care Industry: 1982-1985

2011 ◽  
Vol 5 (1) ◽  
pp. 59 ◽  
Author(s):  
Rose Rubin ◽  
Imre Karafaith ◽  
Kenneth L. Smith
Keyword(s):  
Health Care ◽  
Stock Returns ◽  
Health Care Industry ◽  
Competitive Environment ◽  
Common Stock ◽  
Excess Returns ◽  
Care Industry ◽  
Specific Event ◽  
Acquiring Firms ◽  
The Difference

Employing a methodology commonly used to determine the movement of stock returns around a specific event, we examined the movement of common stock returns of acquiring firms in the health care industry for three periods, 1982-1983, 1984, and 1985. We find that in the 1982-1983 period, investors could expect negative excess returns from holding tock in acquiring firms in the health care industry. In contrast, for the 1984 and 1985 periods we find no evidence of excel returns for investors. The difference between the two periods, we believe, is due to the more competitive environment which existed in the industry in the latter two periods.

Malpractice & Negligence: Cal. Supreme Court Clarifies Negligence Provisions under State’s Elder Abuse Act

1999 ◽  
Vol 27 (2) ◽  
pp. 203-203
Author(s):  
Kendra Carlson
Keyword(s):  
Health Care ◽  
Supreme Court ◽  
Health Care Providers ◽  
Elder Abuse ◽  
Skilled Nursing Facility ◽  
Pressure Sores ◽  
Care Providers ◽  
Nursing Facility ◽  
Skilled Nursing ◽  
The Supreme Court

The Supreme Court of California held, in Delaney v. Baker, 82 Cal. Rptr. 2d 610 (1999), that the heightened remedies available under the Elder Abuse Act (Act), Cal. Welf. & Inst. Code, §§ 15657,15657.2 (West 1998), apply to health care providers who engage in reckless neglect of an elder adult. The court interpreted two sections of the Act: (1) section 15657, which provides for enhanced remedies for reckless neglect; and (2) section 15657.2, which limits recovery for actions based on “professional negligence.” The court held that reckless neglect is distinct from professional negligence and therefore the restrictions on remedies against health care providers for professional negligence are inapplicable.Kay Delaney sued Meadowood, a skilled nursing facility (SNF), after a resident, her mother, died. Evidence at trial indicated that Rose Wallien, the decedent, was left lying in her own urine and feces for extended periods of time and had stage I11 and IV pressure sores on her ankles, feet, and buttocks at the time of her death.

A Tribute to the Late William J. Curran

1996 ◽  
Vol 24 (3) ◽  
pp. 274-275
Author(s):  
O. Lawrence ◽  
J.D. Gostin
Keyword(s):  
Mental Health ◽  
Health Care ◽  
Mental Illness ◽  
United Nations ◽  
Mental Health Care ◽  
Harvard University ◽  
Legal Medicine ◽  
General Assembly ◽  
International Institute ◽  
University Professor

In the summer of 1979, a group of experts on law, medicine, and ethics assembled in Siracusa, Sicily, under the auspices of the International Commission of Jurists and the International Institute of Higher Studies in Criminal Science, to draft guidelines on the rights of persons with mental illness. Sitting across the table from me was a quiet, proud man of distinctive intelligence, William J. Curran, Frances Glessner Lee Professor of Legal Medicine at Harvard University. Professor Curran was one of the principal drafters of those guidelines. Many years later in 1991, after several subsequent re-drafts by United Nations (U.N.) Rapporteur Erica-Irene Daes, the text was adopted by the U.N. General Assembly as the Principles for the Protection of Persons with Mental Illness and for the Improvement of Mental Health Care. This was the kind of remarkable achievement in the field of law and medicine that Professor Curran repeated throughout his distinguished career.

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