What Is the Method of Testing How Often a VaR

question 20

Multiple Choice

What is the method of testing how often a VaR with a certain confidence level was exceeded in the past called?

• A) Stress testing
• B) Back testing
• C) EWMA
• D) The model-building approach

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Definitions:

Dissonance Levels

The degree of conflict or inconsistency experienced by a person when holding two or more contradictory beliefs, ideas, or values.

Impression Formation

The mental process of developing opinions about other people.

Social Interaction

The process by which individuals act and react in relation to others, influencing and being influenced by the behaviors, feelings, and thoughts of one another.

Primacy Effect

The tendency to recall the first items in a sequence more readily than the middle items.