A Portfolio Has a Current Value of $1000 $X$ Is Distributed Normally with Mean 100 and Standard Deviation 100

question 1

Multiple Choice

A portfolio has a current value of $1000. The annual profit $X$ is distributed normally with mean 100 and standard deviation 100. How much capital is adequate for the portfolio at a 95%-VaR?

• A) \(- 133\)
• B) \(- 65\)
• C) \(65\)
• D) \(133\)

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Definitions:

Budgeted Direct Materials Purchases

The estimated cost of raw materials a company plans to acquire for use in production during a specific period.

Materials Inventory

The cost of materials that have not yet entered into the manufacturing process.

Budgeted Direct Materials Purchases

The estimated total cost of direct materials a company plans to buy for its production process, based on forecasted production levels.

Ending Inventory

The total value of all inventory a company has in stock at the end of an accounting period.