The Use of Expected Shortfall (ES) Is Most Appropriate When

question 60

Multiple Choice

The use of expected shortfall (ES) is most appropriate when

• A)there is a small sample size used to estimate probability distributions.
• B)the VaR indicates there is no possibility of losses so another method must be used to determine market risk.
• C)the probability distribution is skewed to the right.
• D)a continuous probability distribution cannot be constructed
• E)The probability distribution indicates there is a possibility of a "fat tail" loss.

---

Definitions:

Genes

Genes are the basic physical and functional units of heredity, made up of DNA, that determine the characteristics of an organism.

Environment

encompasses all external factors and conditions that affect living organisms, including natural forces and other living things, which provides the context for the development and growth of organisms.

Simultaneously

Occurring, operating, or done at the same time.

Darwin

Charles Darwin, a 19th-century naturalist known for his contributions to the science of evolution and his theory of natural selection.