Which of the following measures of risk best highlights the potential loss from extreme negative returns?
A) Standard deviation
B) Variance
C) Upper partial standard deviation
D) Value at risk (VaR)
E) None of the options are correct.

Question

Quizplus · Accepted Answer

Value at Risk (VaR) specifically measures the potential loss in value of a risky asset or portfolio over a defined period for a given confidence interval, thus highlighting the potential loss from extreme negative returns more directly than the other options, which do not specifically focus on extreme losses.

Which of the Following Measures of Risk Best Highlights the Potential