Which of the Following Is FALSE Regarding Value at Risk

question 22

Multiple Choice

Which of the following is FALSE regarding Value at Risk (VaR) ?

• A)It is one of the premier risk-management techniques.
• B)It is a measure of potential loss that could be exceeded at a given level of probability.
• C)It can be calculated as a product of dollar value of position and portfolio return volatility.
• D)It can only be estimated using the analytical method.

Understand and calculate the degree of operating leverage for given sales data.

Calculate and interpret the contribution margin and the contribution margin ratio.

Analyze the relationship between fixed, variable, and total costs in determining profitability.

Understand the impact of sales mix on profitability and break-even analysis.

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Definitions:

Fairness

A principle concerning equitable and impartial treatment or behavior without favoritism or discrimination.

Honesty

The quality of being fair, truthful, and free from deceit in one's actions and communications.

Business

The practice of making one's living by engaging in commerce.

Corporate Intelligence

The gathering and analysis of information on competitors, market conditions, and internal operations to make informed business decisions.