Which of the Following Is True

question 12

Multiple Choice

Which of the following is true

• A) Expected shortfall is always less than VaR
• B) Expected shortfall is always greater than VaR
• C) Expected shortfall is sometimes greater than VaR and sometimes less than VaR
• D) Expected shortfall is a measure of liquidity risk wheras VaR is a measure of market risk

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Definitions:

Manufacturing Firm

A business engaged in the industrial production of goods from raw materials through the use of labor and machinery.

Conversion Costs

The combined costs of direct labor and manufacturing overheads that are incurred to convert raw materials into finished goods.

Factory Overhead

Costs incurred during the manufacturing process that are not directly applicable to individual products, such as maintenance and utilities.

Direct Labor

The workforce engaged directly in the manufacturing process, whose wages are considered part of the production cost.