You may have noticed that VaR is reported as a positive number. What would a negative VaR

Question:

You may have noticed that VaR is reported as a positive number. What would a negative VaR suggest?

(a) VaR is undefined.

(b) Losses could be really, really bad.

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

Step by Step Answer:

Related Book For book-img-for-question

Implementing Enterprise Risk Management Case Studies And Best Practices

ISBN: 9781118745762

2nd Edition

Authors: John Fraser, Betty Simkins, Kristina Narvaez

See More Books

Question Posted: Feb 03, 2024 11:57 PM

See More Questions

Read the case study "Southwest Airlines," found in Part 2 of your textbook. Review the "Guide to Case Analysis" found on pp. CA1 - CA11 of your textbook. (This guide follows the last case in the...
Planning is one of the most important management functions in any business. A front office managers first step in planning should involve determine the departments goals. Planning also includes...
Design a Java class that represents a cache with a fixed size. It should support operations like add, retrieve, and remove, and it should evict the least recently used item when it reaches capacity.
1. Give 3 examples of well-defined sets. 2. Name two subsets of the set of whole numbers using both the listing method and the rule method. 3. Let B [1, 3, 5, 7, 9}. List all the possible subsets of...
In Figure 37.5, let L = 120 cm and d = 0.250 cm. The slits are illuminated with coherent 600-nm light. Calculate the distance y above the central maximum for which the average intensity on the screen...
Income Statements for Caterpillar, Inc., from 1997 to 2001 appear below. a. Enter the data into your worksheet. Assume that 50% of SG&A expense is a variable cost, with the balance being a fixed...
8. Many emerging economies have restrictions on capital outflows to protect their growth and stability; for example, they may impose high taxes on repatriated profits by foreign companies. Where and...
Several years ago, Brian formed Sigma Corporation, a retail company ineligible for the U.S. production activities deduction. Sigma uses the accrual method of accounting. In 2015, the corporation...
Assume the following information: Using the welghted-average method, what is the equlvalent units of production for conversion? Multiple Choice 5,980 units 6,040 units 6,220 units 6,160 units
An increasing number of Americans are moving to a warmer climate when they retire. To take advantage of this trend, Sunny Skies Unlimited is undertaking a major real estate development project. The...
Assume a portfolio is currently worth $250 million. If the portfolio has volatility of 12 percent and a holding period of 15 business days, what is the VaR estimate with 97.5 percent confidence? Now...
Which assumption underlying VaR is the most important yet most questionable? (a) Distributional (b) Nonnegativity (c) Random walk (d) Stationarity (e) Time consistency
Refer again to the data from the MBA new-matriculants survey in exercise. a. Given that a person applied to more than one school, what is the probability that the person is 2426 years old? b. Given...
Prepare the entries to record the transaction 2 A company has three employees, each of whom has been employed since January 1 earns $2750 per month and is paid on the last day of each month On March...
Pet Emporium had a robbery on the weekend in which a large amount of inventory was taken. The loss is covered completely by insurance. A physical inventory count determined that the cost of the...
In a test taken by a class of 50 students, the average was 1500 with a standard deviation of 40. What 2 scores capture the middle 60% of the students?
For questions 1-8, let P = (-2, 5) and Q = (4,8). 1. Find the distance from the point P to the point Q. 2. Find the midpoint of the line segment joining P and Q. 3. Find the slope of the line PQ. 4....
True/False Indicate whether the statement is true or false. ____ 1. In accounting, to value means to record a transaction or event. ____ 2. The recognition issue deals with when a business...
Reconsider the unity feedback system discussed in E4.14. This time select K = 120 and K1 = 10. The closed-loop system is depicted in Figure E4.15. (a) Calculate the steady-state error of the...
Vince, Inc. has developed and patented a new laser disc reading device that will be marketed internationally. Which of the following factors should Vince consider in pricing the device? I. Quality of...
What is the difference between the geometric mean and the arithmetic mean of a set of numbers? Why is the difference relevant to the reporting of mutual fund returns?
Explain how an exchangetraded fund that tracks an index works. What are the advantages of an exchangetraded fund over (a) an openend mutual fund and (b) a closedend mutual fund?
What is a mutual fund's (a) frontend load and (b) backend load?
you are analyzing the cost of debt for a firm. Do you know that the firms 14 year maturity, 7.8 Percent coupon bonds are selling at a price of $834. The Barnes pay interest semi annually. If these...
***Please answer the following using excel and showcasing the formulas/calculations used*** thank you so much Financial information on AAA Ltd. is shown below. AAA Ltd. Income Statement For the Year...
2. In an account Anh Paglinawan currently has $216,670.00. At a rate of 8.00% how long will it take for them to have $298,390.00 assuming semi-annually compounding? (Hint: compute the exact years, do...

You may have noticed that VaR is reported as a positive number. What would a negative VaR

Question:

Step by Step Answer:

Value at Risk VaR is a commonly used risk management tool that quantifies the ...View the full answer

Implementing Enterprise Risk Management Case Studies And Best Practices

Students also viewed these Business questions