The VaR Examines the Size of Loss That Would Occur

question 59

Short Answer

The VaR examines the size of loss that would occur only 1 percent of the time, but it does not specify the size of the shortfall that the company would be expected to have to make up by a distress liquidation of assets should such a large loss occur.A measure called the _____ is used for this.

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Definitions:

Histogram

A graphical representation of the distribution of numerical data designed to display the frequency of data points within specified intervals.

Statistics Classes

Academic courses focused on the science of collecting, analyzing, interpreting, and presenting empirical data.

Ceramics Factory

A manufacturing plant where clay products, such as pottery or tiles, are made and fired.

Batches

Grouped sets of items that are processed or produced together.