"Subadditivity" Is the Requirement of a Coherent Risk Measure That

question 13

Multiple Choice

"Subadditivity" is the requirement of a coherent risk measure that

• A)The risk of a subset of portfolio holdings be strictly less than the risk of the entire portfolio.
• B)The risk of the combination of two portfolios be at most the sum of the risks of the two portfolios.
• C)The risk of the combination of two portfolios be at least the sum of the risks of the two portfolios
• D)The sum of the risks of each constituent of the portfolio equals the total risk of the portfolio.

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Definitions:

Discontinued Segment

A part of a business that has been sold off, shut down, or is no longer operating as a distinct unit.

Trend Percentages

Analysis technique that involves calculating the percentage change for a financial statement item over a period of time to identify patterns or trends.

Cost of Goods Sold

The direct financial outlays involved in creating a company's goods for sale, encompassing labor and material costs.

Acid-Test Ratio

A stringent measure of liquidity that indicates a company's ability to meet its short-term obligations with its most liquid assets, excluding inventory.