Your Beloved Machines Inc

question 11

Multiple Choice

Your Beloved Machines Inc.'s stock has a weekly expected return of 0.0025 and weekly volatility of the returns of 0.03.Then the weekly 95 percent and 99 percent confidence levels (value-at-risk at the 5 and 1 percent levels) for YBM are (where 5 percent left tail is 1.65 standard deviations and 1 percent tail is 2.33 standard deviations away from the mean) :

• A) 4.70 percent and 6.74 percent
• B) 5.23 percent and 3.75 percent
• C) 4.70 percent and 3.75 percent
• D) 2.50 percent and 3.00 percent
• E) None of these answers are correct.

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Definitions:

Price Elasticity

A measure of the responsiveness of the quantity demanded or supplied of a good to a change in its price, indicating how changes in price affect consumption or production.

Slope

In mathematics, the measure of the steepness or angle of a line, defined as the ratio between the rise and the run between two points on the line.

Rectangular Hyperbola

A type of curve, defined as the graph of an equation of the form xy = c, where c is a constant, representing certain economic relationships.

Demand Curve

A graph depicting the relationship between the price of a good and the quantity demanded, typically showing a downward slope.