Question
Which of the following is a limitation of the Value at
Risk (VaR) approach, a widely used risk management tool, to measuring risk?Solution
A limitation of the value at risk (VaR) approach to measuring risk is that it fails to specify the maximum loss that could occur. VAR statistic has three components - a relatively high level of confidence (typically either 95% or 99%), a time period (a day, a month or a year) and an estimate of investment loss (expressed either in absolute or percentage terms). However, at a 99% confidence level what VAR really means is that in 1% of cases (that would be 2-3 trading days in a year with daily VAR) the loss is expected to be greater than the VAR amount. Value At Risk does not say anything about the size of losses within this 1% of trading days and by no means does it say anything about the maximum possible loss.
Select the option that is related to the fifth letter-cluster in the same way as the second letter-cluster is related to the first letter-cluster and th...
Select the option that represents the letters that, when sequentially placed from left to right in the blanks below, will complete the letter series.
What should come in place of? in the given series based on the English alphabetical order?
LPA, PSY, TVW, XYU, ?
Three of the following four letter-clusters are alike in a certain way and thus form a group. Which is the letter-cluster that does NOT belong to that g...
Sunita is ranked 10th from the top and 18th from the bottom in her class. How many students are there in the class?
Select the correct combination of mathematical signs to sequentially replace the * signs and balance the given equation.
76 * 34 * 23 * 12 * 6 * 21
The position(s) of how many letters will remain unchanged if each letter in the word GRACEFUL is arranged in the English alphabetical order?
Figure X is followed by four figures numbered (1), (2), (3), (4). Identify the figure among the four in which figure X is embedded (i.e. contains figure...
In a certain code language, ‘INFERRING’ is written as ‘TMRIIVUMR’. What is the code for ‘STATEMENT’ in that code language?
...In a certain code language 'GPZJ' is coded as '98' and 'OWRS' is coded as '66'. What is the code for 'VIXE' in the given language?
