What Does It Mean If We Are Being Told That

question 17

Multiple Choice

What does it mean if we are being told that the 5% VaR of a portfolio is -4.75%?

• A) The average return of the portfolio is -4.75%
• B) The average loss of the portfolio is 4.75%
• C) There is only a 5% probability of a loss greater than 4.75%
• D) The maximum loss of the portfolio is 4.75% with probability 95%
• E) c and d

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Definitions:

Marginal Costs

The surcharge associated with the fabrication of an additional unit of a good or service.

Short-Run Supply Schedule

The Short-Run Supply Schedule illustrates how much of a good or service producers are willing to supply at different price levels within a short time frame.

Cost Data

Information related to the expenses involved in producing a good or service, including materials, labor, and overhead costs.

Shutdown Point

The level of production and price at which a firm's total revenue is equal to its total variable costs, below which the firm would cease production temporarily.