About 37% of Chinese listed firms have medical expertise, as measured by the existence of senior executives with a medical degree or medical-industry experience. Using the COVID-19 outbreak in China as a natural experiment, we find that the stock returns of firms with medical expertise, excluding those within the healthcare and pharmaceutical industry, are significantly higher than those without. The positive impact is more pronounced if a CEO or Chairman has medical expertise and if the firm is not state-owned. Overall, this study underlines the importance of diversified executive human capital on firm performance through disentangling macro shocks.

We propose a new approach to modeling bond risk and risk premia, inspired by the equity risk-return literature, which does not impose the tight restrictions found in models that generate closed-form bond prices. We estimate the joint dynamics of the volatility and Sharpe ratio of principal-component bond-factor portfolios as functions of yield curve variables and VIX. We uncover an important second factor in risk premia and document a complex time-varying relation between the price and quantity of interest rate risk inconsistent with the frameworks in existing studies. Exploiting this predictability in dynamic portfolio choice appears to enhance portfolio performance. Abstract We propose a new approach to modeling bond risk and risk premia, inspired by the equity risk-return literature, which does not impose the tight restrictions found in models that generate closed-form bond prices. We estimate the joint dynamics of the volatility and Sharpe ratio of principal-component bond-factor portfolios as functions of yield curve variables and VIX. We uncover an important second factor in risk premia and document a complex time-varying relation between the price and quantity of interest rate risk inconsistent with the frameworks in existing studies. Exploiting this predictability in dynamic portfolio choice appears to enhance portfolio performance.