You invest $100 each in two bonds. Each bond will pay you $110 at the end of the year with probability 0.98 and nothing with probability 0.02. The correlation between the bonds is zero. In this scenario, the 98%-VaR of your portfolio is
A) $- 20$ .
B) Zero.
C) $90
D) $200

Question

You invest $100 each in two bonds. Each bond will pay you $110 at the end of the year with probability 0.98 and nothing with probability 0.02. The correlation between the bonds is zero. In this scenario, the 98%-VaR of your portfolio is 
A) $- 20$ .
B) Zero.
C) $90
D) $200

Quizplus · Accepted Answer

The Answer is C

You Invest $100 Each in Two Bonds −20- 20−20 B) Zero

You Invest $100 Each in Two Bonds $- 20$
B) Zero