Question
Which of the following is a limitation of the Value at
Risk (VaR) approach, a widely used risk management tool, to measuring risk?Solution
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 serves as the Chairman of the Inter-State Council in India?
Which of the following states have been the former union territories?
1. Himachal Pradesh
2. Manipur
3. Haryana
4. Tripura
Under the Indian Constitution any arrested person must be appeared before the nearest magistrate with __ hours.
Match the following stadiums with their alternate names:Â
Which of the following is a condition for becoming a member of the Lok Sabha in India?
Which article of the Indian Constitution ensures the "Freedom of Conscience and Free Profession, Practice, and Propagation of Religion"?
Which of the following is the minimum age to become member of Lok Sabha?
Which landmark Supreme Court case in 1954 declared state laws establishing separate public schools for black and white students unconstitutional?
"The Test of My Life" is a book written by which cricketer?
When a bill is referred to a joint sitting of both Houses of Parliament, it is passed by which type of majority?
