Consider the Following Discrete Probability Distributions of Payoffs for 3

question 60

Multiple Choice

Consider the following discrete probability distributions of payoffs for 3 securities that are held in a DI's trading portfolio (payoff amounts shown are in $millions) :

$\begin{array} { lcc } \text { SECURITY } & \text { PROBABILITY } & \text { PAYOFF } \\\text { Alpha } & 0.50 & 355 \\& 0.49 & 150 \\& 0.01 & - 300\end{array}$ $\begin{array} { lcc } \text { SECURITY } & \text { PROBABILITY } & \text { PAYOFF } \\\text {Beta } & 0.50 & 1500 \\& 0.49 & - 300 \\& 0.0025 & - 3,300\end{array}$ $\begin{array} { lcc } \text { SECURITY } & \text { PROBABILITY } & \text { PAYOFF } \\\text {Gamma } & 0.49 &400 \\&0.49&150 \\&0.01 &-150 \\&0.01&-2,000\end{array}$

What is the one-day,99% confidence level,value at risk (VAR) of securities Alpha and Beta,respectively (in millions) ?

• A)$3 and $25.50
• B)$3 and $0.75
• C)$248 and 248
• D)$300 and $300

Explain the importance and functions of international trade organizations.

Describe the impact of regional trade agreements on global commerce.

Understand the sources and importance of funding for nonprofit organizations.

Assess the demographic changes in the United States and their implications for marketing.

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Definitions:

Trade Agreement

A treaty or pact between two or more nations that outlines how they will work together to ensure mutual benefits in trade.

Royalty

A payment made to the owner of certain types of property, such as patents or copyrights, for the right to use that property.

International Monetary Fund (IMF)

Organization established in 1947 to promote trade among member nations by eliminating trade barriers and fostering financial cooperation.