Which of the Following Statements Is True

question 21

Multiple Choice

Which of the following statements is true?

• A)There are no major flaws associated with VAR models like RiskMetrics.
• B)One problem associated with VAR models such as RiskMetrics is the assumption of a normal distribution, that is, a skew of 1.
• C)One problem associated with VAR models such as RiskMetrics is that these models ignore the risk in the payments of accrued interest on an FI's debt securities.
• D)None of the listed options are correct.

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Definitions:

Bilateral Contract

A contractual agreement involving two parties where each promises to perform an act in exchange for the other's act, with mutual obligations binding both parties.

Promised Offer

An offer made by one party to another indicating a willingness to enter into a contract under specified terms.

UCC

The Uniform Commercial Code is an extensive collection of statutes that regulate all business dealings within the United States.

Means Acceptance

The acceptance of an offer in contract law through the performance of the conditions stated in the offer, thus creating a binding contract.