Which of the Following Is True of the 99

question 15

Multiple Choice

Which of the following is true of the 99.9% value at risk?

• A) There is 1 chance in 10 that the loss will be greater than the value of risk
• B) There is 1 chance in 100 that the loss will be greater than the value of risk
• C) There is 1 chance in 1000 that the loss will be greater than the value of risk
• D) None of the above

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Definitions:

Ability-to-Pay Principle

A taxation principle that argues taxes should be levied according to an individual's or entity's capability to bear the tax burden.

Income Taxes

Taxes levied by governments on individuals or corporations' income, where the tax rate may increase as the taxable amount increases.

Excise Taxes

Taxes imposed on the sale of specific goods and services, such as tobacco, alcohol, and gasoline, usually aimed at discouraging their consumption or generating revenue.

Regressive Tax

A tax that takes a larger percentage from low-income earners than from high-income earners, considered regressive because it affects those who are less able to pay.