Value at Risk (VaR) is a widely used risk management tool. A limitation of the VaR approach to measuring risk is that it fails to specify:
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.
What does A/B testing involve in data analytics?
Special effects used to introduce slides in a PowerPoint or any other Software presentation are known as ________?
Which of the following is a characteristic of a public blockchain?
What is the primary purpose of performing backups in an operating system?
Which of the following sorting algorithms has a worst-case time complexity of O(n^2)?
Which of the following is a subset of AI that focuses on enabling machines to understand, interpret, and respond to human language?
Comparing two strings by using which function?
In a synchronous sequential circuit, what is the purpose of the clock signal?
Which optimization algorithm is commonly used for updating the weights of neural networks and helps prevent getting stuck in local minima?
In a virtual memory system, what is a "page fault"?