Which One of the Following Statements Is True Concerning VaR

question 64

Multiple Choice

Which one of the following statements is true concerning VaR?

• A)VaR ignores time.
• B)VaR only applies to time periods of one year.
• C)VaR applies only to time periods equal to or greater than one year.
• D)VaR values can be computed for monthly time periods.
• E)VaR is accurate only for time periods less than one year.

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Definitions:

Diminishing Marginal Returns

A principle stating that as additional units of a variable input are added to a fixed input, the additional output produced from each new unit will eventually decrease.

Normal Profit

The minimum level of profit needed for a company to remain competitive in the market, covering its opportunity costs.

Entrepreneur's Potential Earnings

The hypothetical income an entrepreneur could earn, considering the risks and opportunities associated with starting and running a business.

Annual Lease

A contract or agreement stipulating the rental terms of a property for one year, often specifying the rent amount, payment schedules, and other conditions.