Question
You work as a Market Risk Executive at CBA and want to calculate the DEAR of the bank's traded equity position.After applying the RiskMetric approach
You work as a Market Risk Executive at CBA and want to calculate the DEAR of the bank's traded equity position.After applying the RiskMetric approach and assuming a 5-percent adverse market movement scenario, you calculate DEAR = $7 million. How should you interpret this number in terms of the market risk of the bank's trading position?Select one:O a. The bank will lose $7 million or more over the next day with a 5% probability.Ob. The bank will lose $7 million or less over the next day with a 5% probability.Oc. The bank will lose exactly $7 million over the next day.O d. The bank will lose at most $7 million over the next day O e. The bank will lose at least $3,000 over the next day
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