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Topic: Business
Number of pages / Number of words: 4 / 1084
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They develop their strategy based on the regression equation of the Single-Index Model which takes into consideration not only the historical data but also the future expectation of the market.

3) By adding TIPS, HMC can reduce risk on the portfolio return because the goal of the HMC to ensure a consistent real return...


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According to this goal, since TIPS are issued by U.S. Treasury and assumed that there is no default risk, by definition TIPS become risk-free assets. Another advantage of TIPS is that they are exempt from state and local taxes. Furthermore, other institutions similar to HMC have already realized that it is worthy to include TIPS in their portfolio...


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