Which of the Following Is the Interpretation of a VAR

question 47

Multiple Choice

Which of the following is the interpretation of a VAR of $5 million for one year at 5 percent probability.

• A)the probability is 5 percent that the firm will lose at least $5 million in one year
• B)the probability is at least 5 percent that the firm will lose $5 million in one year
• C)the probability is 5 percent that the firm will lose $5 million in one year
• D)the probability is less than 5 percent that the firm will lose $5 million in one year
• E)none of the above