When Assessing Tail Risk by Looking at the 5% Worst-Case

question 43

Multiple Choice

When assessing tail risk by looking at the 5% worst-case scenario,the VaR is the ________.

• A)most realistic as it is the most complete measure of risk
• B)most pessimistic as it is the most complete measure of risk
• C)most optimistic as it is the most complete measure of risk
• D)most optimistic as it takes the highest return (smallest loss) of all the cases
• E)none of the above

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Definitions:

Sender

The entity in communication who is responsible for creating and transmitting a message to a receiver.

Intrapersonal Communication

The process of internal dialogue or communication with oneself, which involves thinking, self-talk, and personal reflection.

Personal Thoughts

Individual reflections or considerations that are private or internal.

Thinking

The process of using one's mind to consider or reason about something, involving judgment, perception, and the creation of ideas.