Identify the amount needed to have in reserve in order to stave off insolvency with the specified level of probability.
A)Value at Risk
B)Threshold value
C)Fair value
D)Mean value
E)Reserve value

Question

Quizplus · Accepted Answer

Value at Risk (VaR) is a statistical technique used to measure and quantify the level of financial risk within a firm, portfolio, or position over a specific time frame. This measure is often used by financial institutions to estimate the amount of assets needed in reserve to cover potential losses and avoid insolvency at a given confidence level.

Identify the Amount Needed to Have in Reserve in Order