What Is the Method of Testing How Often a VaR

question 20

Multiple Choice

What is the method of testing how often a VaR with a certain confidence level was exceeded in the past called?

• A) Stress testing
• B) Back testing
• C) EWMA
• D) The model-building approach

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Definitions:

Accounting Cycle

The series of steps followed by an organization to track and manage financial transactions, from the initial transaction to the closing of the books.

Special Journals

Special journals are accounting journals designed for recording specific types of transactions in a detailed manner, such as sales or purchases, to streamline the accounting process.

General Journal

A basic accounting ledger where all types of transactions are initially recorded, using a double-entry bookkeeping system, before being posted to specific accounts in the general ledger.

Sales Journal

A specialized accounting journal used to record all sales of merchandise on credit.