How Do You Interpret This VaR Statistic: Prob (R_p $\le$ -009) = 23%?
A) If Your Portfolio Declines by 9

question 75

Multiple Choice

How do you interpret this VaR statistic: Prob (R_p $\le$ -0.09) = 23%?

• A) If your portfolio declines by 9% or more, that decline is expected to be followed by a 23% increase in value
• B) Your portfolio is expected to lose at least 9%, but not more than 23% in any given year
• C) There is a 23% chance that your portfolio will be worth at least 9% less one year from now than it is today
• D) Sometime in the future, your portfolio is expected to lose 9% or more in a single year, but have an overall average rate of return of 23%
• E) If your portfolio rises in value by at least 23%, you should expect a market correction of 9% or more

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Definitions:

Relative Pay

Comparison of the compensation package of one employee to those of others within the same organization or industry.

Internal Equity

Refers to the fairness and consistency in pay structures for employees within the same company, ensuring equitable compensation for similar roles and responsibilities.

Salary

A fixed amount of money paid to an employee, usually on a monthly or annual basis, in exchange for their work.

Compensable Factors

Characteristics of a job that are used to determine its value and appropriate compensation, such as skill level and responsibility.