You have computed the expected return using VaR with a 2.5 percent probability for a one-year period of time.How would this expected return be expressed on a normal distribution curve?
A) lower tail starting at the point that is 2.5 standard deviations below the mean
B) lower tail of a 95 percent probability range
C) the point that corresponds to 2.5 standard deviations below the mean
D) the point that represents the lower end of the 90 percent probability range
E) the negative range that lies within 2.5 standard deviations of the mean

Question

Quizplus · Accepted Answer

The expected return using VaR with a 2.5 percent probability corresponds to the lower tail of a 95 percent probability range on a normal distribution curve.

You Have Computed the Expected Return Using VaR with a 2.5