Question

What is the difference between standard deviation and value at risk? Consider the difference between purchasing...

What is the difference between standard deviation and value at risk? Consider the difference between purchasing a one-year bank CD compared with purchasing a homeowner's insurance policy. Which scenario do you believe is more likely to consider value at risk over standard deviation? Explain.

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Make distinctions between the standard deviation and beta in the measurement of risk in the capital...
Make distinctions between the standard deviation and beta in the measurement of risk in the capital market. Which one of these two metrics (standard deviation and beta) is relevant for measuring the risk of well-diversified portfolio? Explain why
Make distinctions between the standard deviation and beta in the measurement of risk in the capital...
Make distinctions between the standard deviation and beta in the measurement of risk in the capital market. Which one of these two metrics (standard deviation and beta) is relevant for measuring the risk of well-diversified portfolio? Explain why.
What is the difference between the standard deviation and the standard error? Is the standard error...
What is the difference between the standard deviation and the standard error? Is the standard error a standard deviation? Explain a real life example using a distribution histogram.
These questions refer to Purchasing Power Parity. Consider the relationship between expansionary monetary policy. the value...
These questions refer to Purchasing Power Parity. Consider the relationship between expansionary monetary policy. the value of the dollar, and net imports. How does this new dollar value impact net exports? (3 Points) Do these two work with each other in regards to economic growth? Explain. (3 Points)
Compute the expected return, standard deviation, and value at risk for each of the following investments:...
Compute the expected return, standard deviation, and value at risk for each of the following investments: Investment (A): Pays $800 three-fourths of the time and a $1,200 loss otherwise. Investment (B): Pays $1,000 loss half of the time and a $1,600 gain otherwise. State which investment will be preferred by each of the following investors, and explain why. (i) a risk-neutral investor (ii) an investor who seeks to avoid the worst-case scenario. (iii) a risk-averse investor.
Compute the expected return, standard deviation, and value at risk for each of the following investments:...
Compute the expected return, standard deviation, and value at risk for each of the following investments: Investment (A): Pays $800 three-fourths of the time and a $1,200 loss otherwise. Investment (B): Pays $1,000 loss half of the time and a $1,600 gain otherwise. State which investment will be preferred by each of the following investors and explain why. (i) a risk-neutral investor (ii) an investor who seeks to avoid the worst-case scenario. (iii) a risk-averse investor.
Consider the following information: Standard Deviation                    Beta Security C            &nbs
Consider the following information: Standard Deviation                    Beta Security C                   20%                                     1.25 Security K                   30%                                     0.95 Which security should have the higher expected return? Explain in full. Please make sure to also explain which security has more total risk, and which security has more systematic risk within your answer.
When we calculated the Variance (on the way to Standard Deviation) we computed the difference between...
When we calculated the Variance (on the way to Standard Deviation) we computed the difference between what we saw in each case (or in each observation), and the Expected value for all of the observations. Then, we squared those differences before weighting this element by the probability of actually seeing that observation or scenario. So, what is the effect (or are the effects) of squaring that value?
Which describes the standard deviation? a form of measurement of the average difference between sample values...
Which describes the standard deviation? a form of measurement of the average difference between sample values and the sample mean the confidence level that a sample mean accurately represents a population mean the value for which half of the sample elements are no bigger, and half are no smaller the interval around the sample mean that you expect to contain the population mean
Explain the difference between Discounts and Allowances with respect to being different pricing strategies. Do you...
Explain the difference between Discounts and Allowances with respect to being different pricing strategies. Do you believe a Discount is more effective than an Allowance - with which product do you think this is effective and why? Or if you believe an Allowance is more effective; then identify a product and why the Allowance would be more effective a pricing strategy to use than Discounts. ****This is a marketing class****
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT