Assume an FI's Daily Earnings at Risk Are $5000 and That

question 19

Multiple Choice

Assume an FI's daily earnings at risk are $5000 and that the FI is required to hold its position for 10 days.What is the position's VAR (round to two decimals) ?

• A)$5000 * \( \sqrt10\) = $15,811.39
• B)$5000 * \( \sqrt{(10 - 1)}\) = $15,000.00
• C) \( \sqrt{\$5000}\) * 10 = $707.11
• D)\( \sqrt{\$5000}\) * (10 - 1) = $636.40