This article examines the formation of efficient portfolios using mutual funds that invest in life settlements in combination with fixed-income and equity index funds. We investigate the optimal weighting of these assets and their contribution to performance and portfolio risk. We find a significant negative correlation between the selected life settlement funds and certain U.S. and European fixed-income and equity funds. Furthermore, these correlations are lower than the correlations between the index funds that replicate each other. These results suggest that life settlement funds are an appropriate financial instrument to achieve greater diversification for a portfolio made up of a fund of funds and to improve fund performance as they provide a fixed return with a lower level of risk.
There is a gap in the literature on the assessment of renewable energy projects regarding the role of regulatory real options (RROs) that do not depend entirely on the project promoter and yet affect the value of the project. This paper provides a methodology for evaluating investments in offshore wind generation in Denmark, based on the use of this type of options. The main results show that these RROs held by the administration, decrease the value of these renewable generation projects in Denmark. This confirms previous research for onshore generation in the same country.
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