Which One of the Following Is the Best Interpretation of This

question 77

Multiple Choice

Which one of the following is the best interpretation of this VaR statistiC: Prob (Rp ≤ -.15) = 37%?

• A)If your portfolio declines by 15 percent or more, that decline is expected to be followed by a 37 percent increase in value.
• B)Your portfolio is expected to lose at least 15 percent, but not more than 37 percent in any given year.
• C)There is a 37 percent chance that your portfolio will decline in value by at least 15 percent over the next year.
• D)Sometime in the future, your portfolio is expected to lose 15 percent or more in a single year, but have an overall average rate of return of 37 percent.
• E)There is a 37 percent chance that your portfolio will lose at least 15 percent of its value over the next 10 years.

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Definitions:

Technological Innovation

The process of developing and applying new technologies or improvements to existing technologies to solve problems or enhance capabilities.

Research Efforts

Systematic investigations with the aim of establishing facts and reaching new conclusions.

Technological Determinism

The theory that technology is the principal factor driving societal changes and shaping human history.

Research Scientists

Professionals engaged in systematic investigation and study in various fields of science to acquire new knowledge and understanding.