VaR-Bases Risk Decomposition Is the Calculation That Allocates the Total

question 1

Multiple Choice

VaR-bases risk decomposition is the calculation that allocates the total VaR of a portfolio to each of its assets or subportfolios.Which of the following statements is most valid?

• A)Risk decomposition is based on the fact that VaR is linearly homogeneous in its constituents.
• B)Risk decomposition assumes that the assets in a portfolio are distributed multivariate normal.
• C)Risk decomposition depends on the sequence in which assets are added to an existing portfolio.
• D)Risk decomposition is not possible if Monte Carlo simulation is used to compute VaR.

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Quarterly Dividends

These are dividends paid by a corporation to its shareholders every three months, or four times a year, representing a portion of the company's earnings.

Book Value

The net value of a company's assets minus its liabilities and intangible assets, often used as a measure of a company's actual worth.

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