VaR as a Risk Measure Has the Following Deficiency

question 3

Multiple Choice

VaR as a risk measure has the following deficiency:

• A)It does not consider the shape of losses in the left tail of the P&L distribution.
• B)It does not consider the shape of losses outside the left tail of the P&L distribution.
• C)Neither of the above.
• D)Both of the above.

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Definitions:

Bromecresol Purple

A chemical pH indicator that changes color at a pH range of 5.2 to 6.8, used in various laboratory and medical tests.

Adhesion

The tendency of dissimilar particles or surfaces to cling to one another, often causing materials to stick together.

Hydrogen Bonds

Weak bonds between partially positive hydrogen atoms and partially negative elements like oxygen or nitrogen, crucial in biological structures.

pH Scale

A measure of the acidity or basicity of an aqueous solution, ranging from 0 (most acidic) to 14 (most basic) with 7 as neutral.