What Is the Difference Between Standard Deviation and Value at Risk

question 78

Essay

What is the difference between standard deviation and value at risk? Consider the difference between purchasing a one-year bank CD compared with purchasing a homeowner's insurance policy. Which scenario do you believe is more likely to consider value at risk over standard deviation? Explain.

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Definitions:

Psychoanalytic Theory

A set of theories originating from Sigmund Freud, which suggest that human behavior is profoundly influenced by unconscious motives.

Conversion Disorder

A mental condition where psychological stress is expressed through physical symptoms that have no medical basis.

Dissociative Amnesia

A disorder characterized by the inability to recall important personal information, usually resulting from trauma or stress.

Organic Amnesia

A memory disorder usually caused by brain damage or disease, where the ability to learn new information or retrieve information formed before the incident is impaired.