Which One of the Following Statements Is True Concerning VaR

question 64

Multiple Choice

Which one of the following statements is true concerning VaR?

• A)VaR ignores time.
• B)VaR only applies to time periods of one year.
• C)VaR applies only to time periods equal to or greater than one year.
• D)VaR values can be computed for monthly time periods.
• E)VaR is accurate only for time periods less than one year.

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Definitions:

Initial Investment

The sum of funds allocated for initiating a project, acquiring an asset, or investing in a financial product.

Future Value

The estimated value of an investment at a specified future date, considering factors like interest rates and compounding.

Present Value

The present-day valuation of money or cash flows expected in the future, calculated with a designated rate of return.

Investment

The act or method of distributing assets, typically funds, in anticipation of earning revenue or gains.