1. Which of the following statements is true if a probability distribution shows a 5%, $200,000 VaR and a CVaR of $500,000?

   1. There is a 5% probability of a maximum loss of $500,000

   2. There is a 95% confidence that maximum loss on any given day will not exceed $200,000

   3. There is a 5% probability of a loss in earnings greater than $200,000

   4. The maximum loss that can occur is $700,000