Which One of the Following Correctly States the VaR for a 3-Year

question 14

Multiple Choice

Which one of the following correctly states the VaR for a 3-year period with a 2.5 percent probability?

• A) Prob[R_p,T ≤ E(R_p) × 3 - 1.645 × σ_p √3]
• B) Prob[R_p,T ≤ E(R_p) × √3 - 1.645 × σ_p 3]
• C) Prob[R_p,T ≤ E(R_p) × √3 - 1.645 × σ_p √3]
• D) Prob[R_p,T ≤ E(R_p) × 3 - 1.960 × σ_p √3]
• E) Prob[R_p,T ≤ E(R_p) × √3 - 1.960 × σ_p 3]

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Definitions:

Equivalent Units of Production

A concept in process costing that converts partially completed products into an equivalent number of fully completed units for inventory accounting purposes.