Stone - Does vertical sharing reduce ER of portfolio?

Chris Heim ( (no email) )
Wed, 31 Mar 1999 12:46:13 -0600

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The CSM seem to have conflicting answers to the question. The question #17
from 1989 (pg 327 #B6) says that it doesn't, but Question #45b (pg 327 #B8)
says that it does. It is clear that vertical sharing will not reduce the ER
of a single risk. But what is the correct impact on the entire portfolio?

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The=20CSM seem to have conflicting answers to the question.  The question =#17=20from 1989 (pg 327 #B6) says that it doesn't, but Question #45b (pg 327 =#B8) says=20that it does.  It is clear that vertical sharing will not reduce =the ER of=20a single risk.  But what is the correct impact on the entire=20portfolio?
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