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.
____ is used for measuring the draft of agricultural implements.
Milk is considered as the complete food. According to FAOSTAT; Rank of India in global milk production is ……………………….
..."Sagar Parikrama" is a transformative journey planned across the coastal belt to show solidarity with the fisher folk, fish farmers, and related stakeho...
Wheat is mainly a rabi cereal crop grown for food. Wheat inflorescence is…………….
Which of the following is a long-term effect of urea application?
Which one is central to soil health?
At Break event point, the profits to the farmer is
The maximum amount of energy is liberated on oxidation of ____
Khapra beetle is pest of
The process of removing the green colouring (known as chlorophyll) from the skin of citrus fruit. This is achieved by introducing measured amounts of et...
