Practitioners Often Use a ________% VaR, Meaning That ________% of Returns

question 48

Multiple Choice

Practitioners often use a ________% VaR, meaning that ________% of returns will exceed the VaR, and ________% will be worse.

• A) 25; 75; 25
• B) 75; 25; 75
• C) 1; 99; 1
• D) 95; 5; 95
• E) 80; 80; 20

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Definitions:

Indenture

A formal agreement, or contract, between a bond issuer and the bondholders, specifying the terms of the bond.

Sinking Fund

A fund established by an entity by setting aside revenue over time for the purpose of paying off debt or replacing a future expense.

Protective Covenants

Clauses in a contract or bond indenture that restrict the borrower from certain activities, aiming to protect creditors.

Real Rates

Interest rates or rates of return that have been adjusted for inflation, showing the real purchasing power of the amount.