What Is the Definition of Value-At-Risk (VAR)for a One-Year Horizon

question 17

Multiple Choice

What is the definition of value-at-risk (VAR) for a one-year horizon?

• A) VAR is the standard deviation of the firm's equity returns per year.
• B) VAR is the variance of the firm's equity returns per year.
• C) VAR is the value that the firm's losses will exceed with a given probability for a one-year horizon.
• D) VAR is the value that the firm's profits will exceed with a given probability for a one-year horizon.
• E) VAR is the variance of the firm's profits per year.

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Definitions:

Regional Uplift

The upward movement of the Earth's surface over a broad area, often due to tectonic forces, leading to changes in landscape and elevation.

Low-gradient River

A river with a gentle slope, resulting in slow water movement and often meandering courses.

Downcutting

The erosional process by which a river cuts downward into its bed, deepening the river channel.

Discharge

The volume of water flowing through a river or stream or out of a particular structure, often measured in cubic meters per second.