The most common measure of loss associated with extremely negative returns is ________.
A)lower partial standard deviation
B)value at risk
C)expected shortfall
D)standard deviation
E)none of the above

Question

Quizplus · Accepted Answer

Value at risk (VaR) is the most common measure of loss associated with extremely negative returns. VaR represents the maximum loss that an investor can expect to experience with a certain probability over a given time horizon. It is calculated by estimating the minimum expected loss level over a given time horizon at a certain confidence level. Other measures such as lower partial standard deviation, expected shortfall, and standard deviation may also be useful in assessing risk, but VaR is the most commonly used in practice.

The Most Common Measure of Loss Associated with Extremely Negative