A loss that will be exceeded with a specific probability over a specified time horizon is called:

Question

Quizplus · Accepted Answer

The term described in the question is "Value at Risk" or VaR. VaR is a risk management tool used to measure the potential loss of an investment or portfolio over a specified time horizon with a given degree of confidence. It is widely used in financial institutions to set risk limits and determine the amount of capital reserves required to cover potential losses. Options A and D are not applicable to the described scenario. Systematic risk is a type of market risk that cannot be diversified away, while money-market risk refers to the risk of loss due to changes in interest rates in money markets.

A Loss That Will Be Exceeded with a Specific Probability