Currency Considerations for Litigation Fund Managers and Investors
The recent unprecedented and rapid strengthening in the US dollar, as depicted in the following 6-month graph of the US dollar index (USD as compared to a basket of currencies), created a significant 8% swing in currency rates in a matter of days.
Portfolio Theory in the Context of Litigation Finance (1 of 2)
Portfolio risk is generally influenced by three main factors: volatility of results, correlation (of outcomes within a given portfolio) and the size of the portfolio. For the purposes of this article, I have assumed that correlation within a portfolio is non-existent, as each case stands on its own and is not influenced by others in the portfolio.