United Healthcare 2002 Annual Report Download - page 39

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QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market risk represents the risk of changes in value of a financial instrument caused by changes in interest
rates and equity prices.
Approximately $6.2 billion of our cash and investments at December 31, 2002 was invested in fixed
income securities. We manage our investment portfolio within risk parameters approved by our board of
directors; however, our fixed income securities are subject to the effects of market fluctuations in interest
rates. Assuming a hypothetical and immediate 1% increase or decrease in interest rates applicable to our
fixed income portfolio at December 31, 2002, the fair value of our fixed income investments would
decrease or increase by approximately $205 million.
At December 31, 2002, our UnitedHealth Capital business had approximately $150 million of equity
investments primarily in various public and non-public companies concentrated in the areas of health
care delivery and related information technologies. Market conditions that affect the value of health care
or technology stocks will likewise impact the value of our equity portfolio.
CONCENTRATIONS OF CREDIT RISK
Investments in financial instruments such as marketable securities and accounts receivable may subject
UnitedHealth Group to concentrations of credit risk. Our investments in marketable securities are
managed under an investment policy authorized by our board of directors. This policy limits the
amounts that may be invested in any one issuer and generally limits our investments to U.S.
Government and Agency securities, state and municipal securities and corporate debt obligations that
are investment grade. Concentrations of credit risk with respect to accounts receivable are limited due
to the large number of employer groups that constitute our customer base. As of December 31, 2002,
there were no significant concentrations of credit risk.
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UnitedHealth Group