The Difference Between Standard Deviation and Value at Risk Is

question 22

Multiple Choice

The difference between standard deviation and value at risk is:

• A)Nothing, they are two names for the same thing
• B)Value at risk is a more common measure in financial circles than is standard deviation
• C)Standard deviation reflects the spread of possible outcomes where value at risk focuses on the value of the worst outcome
• D)Value at risk is expected value times the standard deviation

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Definitions:

Risk Avoidance

A strategy in risk management involving the elimination of hazards, activities, and exposures that can negatively affect an organization's assets.

Execution Phase

The stage in a project or plan where the strategies and planning are put into action to achieve the project's objectives.

Risk Response Plan

A strategic approach to identifying, assessing, and developing options and actions to deal with potential threats or opportunities.

Total Risk

The complete range of potential threats to the success of a project or investment, encompassing both known risks and those that cannot be anticipated.