Which One of the Following Value-At-Risk Measures Would Be Most

question 86

Multiple Choice

Which one of the following Value-at-Risk measures would be most appropriate for a portfolio designed for a very risk-adverse investor?

• A) Prob (R_p ≤ − 0.20) = 100%
• B) Prob (R_p ≤ − 0.15) = 50%
• C) Prob (R_p ≤ − 0.10) = 25%
• D) Prob (R_p ≤ − 0.10) = 10%
• E) Prob (R_p ≤ − 0.05) = 1%

---

Definitions:

Wire and Cloth

A reference to a set of classic experiments in developmental psychology, often associated with attachment theory, where baby monkeys showed preference for cloth surrogate mothers over wire ones, despite the wire mothers providing food.

Evolutionary Perspective

A theoretical approach that explains behavior and mental processes through the lens of adaptation and natural selection.

Attachment

Attachment is a deep and enduring emotional bond that connects one person to another across time and space, particularly evident in the relationships between infants and caregivers.

Reciprocal Relationships

Mutual interactions or exchanges between two or more parties, where both or all individuals benefit from the relationship.