Explain why backtesting and capital adequacy lead to diametrically opposed choices for the confidence level and horizon.

Question:

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Value at Risk The New Benchmark for Managing Financial Risk

ISBN: 978-0071464956

3rd edition

Authors: Philippe Jorion

See More Books

Question Posted: May 03, 2016 02:12 AM

See More Questions

The management at Sage National Bank located in Key West, Florida, is calculating the key capital adequacy ratios for its third-quarter reports. At quarter-end, the banks total assets are $95 million...
Identify the five zones of capital adequacy and explain the mandatory regulatory actions corresponding to each zone.
Why is capital adequacy more of a problem for commercial banks than for most other businesses?
Modify the symbol-table API to handle values with duplicate keys by having get() return an iterable for the values having a given key. Implement BST and Index as dictated by this API. Discuss the...
On July 1, 2011, Ticino Inc, invested CHF720,000 in a mine estimated to have 800,000 tons of ore of uniform grade. During the last 6 months of 2011, 100,000 tons of ore were mined and sold....
Rightstore plc is a retailer that operates a customer loyalty programme. For every pound that a customer spends in any of the companys stores, they receive one point. Once a customer has accrued...
What are the companies doing to make employees work meaningful and significant?(pp. 470472)
Rick and Maria had been married for 20 years before their divorce in the current year. At that time, they made the usual property settlement: Maria got the house, the van, and the cat; Rick got the...
I need help with the spreadsheets Garden Sales, Inc., sells garden supplies. Management is planning its cash needs for the second quarter. The company usually has to borrow money during this quarter...
Gaffel Company produces two types of calculators: scientific and business. Both products pass through two producing departments. The business calculator is by far the more popular. The following...
For what purposes is a long time horizon advisable when computing the VAR?
What are three alternative approaches to measuring VAR and their benefits?
For each of the following scenarios, indicate how they would be classified for fund balance reporting 1. Bond proceeds of $15.000.000 that must be used for construction of a fire substation remain...
Pop Company holds 70% of Son Company stock. Pop has sold inventory to Son Company as follows: Percent of Sold Sales Inventory Cost to Price to Held at Year Pop Son Year end 2018 $203,000 $355,000 30%...
A B C D E F G H J K L 1 Cost Mortgage Payments 2 Cost Description The upscale hotel's building was acquired for $10 million, leading to monthly mortgage payments of $60,000. Behavior Dollar Amount...
What celebrity attributes make for effective celebrity product endorsements? Celebrity testimonials are advertising messages delivered by famous people who say or imply that they use the...
Initial investment of $100,000 in a new medical equipment. Interest Rate 10% (Borrowed money from a bank). Item Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Investment 100,000 Expected Cash Flow 20,000...
How do I draw a top view of this sketch and I was also wondering how to draw an oblique cabinet projection. + + 1 1 ' '
Assume a 0.05 time value of money. We have a debt to pay and are given a choice of paying $1,000 now or some amount X five years from now. What is the maximum amount that X can be for us to be...
What do you think?
The world's largest carpet maker has just completed a feasibility study of what to do with the 16,000 tons of overruns, rejects, and remnants it produces every year. The company's CEO launched the...
Each year in the United States nearly 5 billion pounds of discarded carpet end up in landfills. In response to this situation, the carpet manufacturer in Problem 5-34 has decided to start a take-back...
Manuel has the following investment planned: he is going to make a $12,000 deposit every year for the next 5 years, which means he plans to make the first deposit one year from now. One year after...
1-The yield to maturity will be greater than the coupon rate when a bond is selling at a premium. Select one: a. False b. True 2-Which one of the following would have the greatest present value,...
! Required information [ The following information applies to the questions displayed below. ] Year 1 total cash dividends Year 2 total cash dividends Year 3 total cash dividends Year 4 total cash...
WISE-HOLLAND CORPORATION On June 15, 2013, Marianne Wise and Dory Holland came to your office for an initial meeting. The primary purpose of the meeting was to discuss Wise-Holland Corporation's tax...

Explain why backtesting and capital adequacy lead to diametrically opposed choices for the confidence level and horizon.

Question:

Step by Step Answer:

To conclude I can say that backtesting is better ...View the full answer

Value at Risk The New Benchmark for Managing Financial Risk

Students also viewed these Finance questions