A Portfolio Has a Current Value of $1000 $X$ Is Distributed Normally with Mean 100 and Standard Deviation 100

question 5

Multiple Choice

A portfolio has a current value of $1000.The annual profit $X$ is distributed normally with mean 100 and standard deviation 100.How much capital is adequate for the portfolio at a 95%-VaR?

• A) \(- 133\)
• B) \(- 65\)
• C) \(65\)
• D) \(133\)

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Definitions:

Double-Entry Bookkeeping

An accounting system where every transaction affects at least two accounts to maintain a balanced set of financial records.

Cash Balance

The total amount of cash or cash equivalents that a company or individual has available at any given point in time.

Stockholders' Equity

The residual interest in the assets of a corporation that remains after deducting its liabilities.

Operating Activities

Activities directly related to the primary operations of a business, such as selling products or services, which are reflected in the cash flow from operating activities in financial statements.