Which of the following is a limitation of the Value at Risk (VaR) approach, a widely used risk management tool, to measuring risk?
A limitation of the value at risk (VaR) approach to measuring risk is that it fails to specify the maximum loss that could occur. VAR statistic has three components - a relatively high level of confidence (typically either 95% or 99%), a time period (a day, a month or a year) and an estimate of investment loss (expressed either in absolute or percentage terms). However, at a 99% confidence level what VAR really means is that in 1% of cases (that would be 2-3 trading days in a year with daily VAR) the loss is expected to be greater than the VAR amount. Value At Risk does not say anything about the size of losses within this 1% of trading days and by no means does it say anything about the maximum possible loss.
Who has recently partnered with the Election Commission of India for information on voting process?
Which famous temple in Uttar Pradesh is dedicated to Lord Rama and is believed to be his birthplace?
Under which article of the Constitution, the Allahabad High Court has recently declared the UP Board of Madrasa Education Act 2004 unconstitutional?
Which CPSE has received approval from the Reserve Bank of India (RBI) to set up a wholly-owned finance company in the GIFT City in Gujarat & will contri...
On which date ‘World Turtle Day’ is celebrated every year to spread awareness about turtles?
Which mutual fund company has launched Nifty Alpha 50 Index Fund which provides investors with a chance to invest in a well-diversified portfolio of sto...
National Commission for Women has signed an agreement with which security force in March 2024 to combat human trafficking in India?
After a prolonged period of hot and dry weather, some parts have been given Drought status by which country recently?
The National Highways Authority of India (NHAI) aims to develop around 10,000 km of Optic Fibre Cables (OFC) infrastructure by which fiscal year?
Where is the headquarters of the Directorate General of Civil Aviation located?