Which of the Following Statements Is True

question 21

Multiple Choice

Which of the following statements is true?

• A)There are no major flaws associated with VAR models like RiskMetrics.
• B)One problem associated with VAR models such as RiskMetrics is the assumption of a normal distribution, that is, a skew of 1.
• C)One problem associated with VAR models such as RiskMetrics is that these models ignore the risk in the payments of accrued interest on an FI's debt securities.
• D)None of the listed options are correct.

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Definitions:

Agreement

A mutual understanding or arrangement between two or more parties regarding their rights and responsibilities.

Legitimate Offer And Acceptance

Refers to a valid proposal made by one party and the unqualified agreement to that proposal by another, constituting a crucial aspect of contract law.

Legality

The state or condition of being in accordance with the law; compliance with legal statutes and regulations.

Legal Purpose

The requirement that an agreement or contract must consist of lawful activities and meet legal criteria to be enforceable.