If Every Position in a Portfolio Is Doubled in Size

question 29

Multiple Choice

If every position in a portfolio is doubled in size, the risk contribution of the original portion of the portfolio, as measured by VaR, will

• A) Remain the same as before.
• B) Double.
• C) Halve.
• D) More than double.

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Definitions:

Axon

A long, slender projection of a nerve cell, or neuron, that conducts electrical impulses away from the neuron's cell body to other neurons, muscles, or glands.

Local Potential

Small changes in membrane potential that are localized and can lead to the generation of an action potential if threshold is reached.

Resting Membrane Potential

The electrical charge difference across the cell membrane when the cell is not conducting electrical signals, maintaining a negative charge inside relative to the outside.

Plasma Membrane

The biological membrane that separates the interior of all cells from the outside environment, controlling the passage of substances in and out of cells.