The measure of risk that focuses on the worst possible outcome is called:
A)Expected rate of return
B)Risk-free rate of return
C)Standard deviation of return
D)Value at risk

Question

Quizplus · Accepted Answer

The measure of risk that focuses on the worst possible outcome is called value at risk (VaR). VaR is a statistical measure that quantifies the potential for loss in an investment or portfolio. It calculates the maximum potential loss that could occur with a certain level of probability, typically over a specified time frame. VaR is important in risk management as it helps investors and businesses understand the level of risk they are taking on and make informed decisions to mitigate that risk.

The Measure of Risk That Focuses on the Worst Possible