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For each of the following actions, identify whether the method of risk assessment motivating the action is due to the value at risk or the
For each of the following actions, identify whether the method of risk assessment motivating the action is due to the value at risk or the standard deviation of an underlying probability distribution.
a. You buy life insurance.
b. A shopowner sells both cycling and tennis equipment in her shop.
c. In your role as a central banker, you provide emergency loans to illiquid intermediaries.
d. An art collector insures her art purchases against theft.
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