The Use of Expected Shortfall (ES)is Most Appropriate When

question 62

Multiple Choice

The use of expected shortfall (ES) is most appropriate when

• A)there is a small sample size used to estimate probability distributions.
• B)the VAR indicates there is no possibility of losses so another method must be used to determine market risk.
• C)the probability distribution is skewed to the right.
• D)a continuous probability distribution cannot be constructed.
• E)the probability distribution indicates there is a possibility of a "fat tail" loss.

---

Definitions:

Processions

Organized groups moving together in a formal or ceremonial manner, often associated with religious, celebratory, or mourning practices.

Bronze

An alloy of copper and tin, often used for sculpture, tools, weapons, and building materials in ancient and medieval periods due to its hardness and durability.

Hindu Stone Temples

Religious structures constructed from stone in Hinduism to house deities and provide space for ceremonies and pilgrimages.

Gal Vihara

A rock temple of the Buddha situated in Sri Lanka, known for its massive carved Buddha statues dating from the 12th century.