Suppose a world has two risky assets: HotPot and IceCream. The following table shows the holding period returns in each scenario. Suppose the T-bill rate is 5%. Scenario Probability Return (HotPot) Return (IceCream) Rainy 0.02 10% -5% Snowy 0.03 15% -15% Windy 0.9 10% 8% Sunny 0.05 -10% 25% Which answer is the closest value to the fifth-percentile value at risk (VaR) of holding IceCream? A. -15% B. -5% C. 25% D. -10%
Unitary Method
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Speed, Time, and Distance
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Profit and Loss
The amount earned or lost on the sale of one or more items is referred to as the profit or loss on that item.
Units and Measurements
Measurements and comparisons are the foundation of science and engineering. We, therefore, need rules that tell us how things are measured and compared. For these measurements and comparisons, we perform certain experiments, and we will need the experiments to set up the devices.
Suppose a world has two risky assets: HotPot and IceCream. The following table shows the holding period returns in each scenario. Suppose the T-bill rate is 5%.
|
Scenario |
Probability |
Return (HotPot) |
Return (IceCream) |
|
Rainy |
0.02 |
10% |
-5% |
|
Snowy |
0.03 |
15% |
-15% |
|
Windy |
0.9 |
10% |
8% |
|
Sunny |
0.05 |
-10% |
25% |
Which answer is the closest value to the fifth-percentile value at risk (VaR) of holding IceCream?
| A. |
-15% |
|
| B. |
-5% |
|
| C. |
25% |
|
| D. |
-10% |
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