The Value-At-Risk Measure Assumes Which One of the Following

question 86

Multiple Choice

The Value-at-Risk measure assumes which one of the following?

• A)returns are normally distributed
• B)portfolios lie on the efficient frontier
• C)all portfolios are fully diversified
• D)returns tend to follow repetitive patterns
• E)the risk premium is constant over time

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Definitions:

Option

A financial derivative that represents a contract giving the buyer the right, but not the obligation, to buy or sell an underlying asset at a specified strike price on or before a specified date.

Employee Stock Options

A right, purchased from one party by another, granting the purchaser the option, but not the requirement, to either buy (call) or sell (put) a share at a pre-decided price during a specific timeframe or on a certain date.

Align Goals

The process of adjusting strategies or actions to ensure that various objectives or aims are in harmony or agreement.