If the daily earnings at risk (DEAR) for a bond at 1 percent level is $13,065, it means that

1. There is a 1 percent chance that the loss of this bond would be $13,065 or more
2. There is a 5 percent chance that the loss of this bond would be $13,065 or more
3. We are 95 percent confident that the loss of this bond would not exceed $13,065
4. Both A and B are correct