Which One of the Following Value-At-Risk Measures Would Be Most

question 12

Multiple Choice

Which one of the following Value-at-Risk measures would be most appropriate for a portfolio designed for a very risk-adverse investor?

• A)Prob (R_p ≤ − .20)= 100%
• B)Prob (R_p ≤ − .15)= 50%
• C)Prob (R_p ≤ − .10)= 25%
• D)Prob (R_p ≤ − .10)= 10%
• E)Prob (R_p ≤ − .05)= 1%

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Definitions:

Cortisol

A hormone synthesized by the adrenal glands that is often secreted in reaction to stress and decreased levels of blood sugar.

Myelin Sheath

A fatty layer encasing the axons of some neurons, which increases the speed at which electrical impulses propagate along the nerve cells.

Adrenal Glands

Endocrine glands located above the kidneys, responsible for producing hormones like adrenaline and cortisol, involved in stress response.

Nerve Network

A system of interconnected nerve cells (neurons) that work together to process and transmit information in the body.