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CPCU 500 - Breaking Down Risk Modeling 9.3 Questions And Answers With Verified Solutions 100% Correct!!! $12.49   Add to cart

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CPCU 500 - Breaking Down Risk Modeling 9.3 Questions And Answers With Verified Solutions 100% Correct!!!

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CPCU 500 - Breaking Down Risk Modeling 9.3 Questions And Answers With Verified Solutions 100% Correct!!!

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  • August 14, 2024
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  • 2024/2025
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CPCU 500 - Breaking Down Risk
Modeling 9.3 Questions And Answers
With Verified Solutions 100% Correct!!!
A technique to quantify financial risk by measuring the likelihood of losing more
than a specific dollar amount over a specific period of time - ANSWER✔✔ Value at
risk (VaR)


A technique to assess earnings volatility by measuring the likelihood that earnings
will be below a specific dollar amount over a specific period of time - ANSWER✔✔
Earnings at risk (EaR)


True or false?


VaR and EaR are measurement techniques that only financial institutions can use.
- ANSWER✔✔ False. While VaR and EaR are primarily associated with financial
institutions, both measurement techniques are also beneficial for nonfinancial
organizations of all varieties that need to evaluate the financial risks associated
with business decisions.


__________ is typically used to determine the probability of loss on an
investment portfolio over a certain, usually short, time period - ANSWER✔✔
Value at risk (VaR)


__________ is mainly used by financial institutions to determine the amount by
which the net income (or earnings) of an investment may shift as a result of
changes in market conditions, such as interest rates going up or down -
ANSWER✔✔ Earnings at risk (EaR)

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