Which of the Following Is True

question 12

Multiple Choice

Which of the following is true

• A) Expected shortfall is always less than VaR
• B) Expected shortfall is always greater than VaR
• C) Expected shortfall is sometimes greater than VaR and sometimes less than VaR
• D) Expected shortfall is a measure of liquidity risk wheras VaR is a measure of market risk

---

Definitions:

Price/Earnings

Also known as the P/E ratio, this measures a company's current share price relative to its per-share earnings.

Profit Margin

A financial metric expressing the percentage of income that remains as profit after all expenses, including taxes, are subtracted from total revenues.

Acid-Test

A financial metric that assesses a company's ability to pay its current liabilities with its quick assets (cash, marketable securities, and receivables).

Operating Segment

An operating segment is a component of a business that engages in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the entity's chief operating decision maker.