1. An advantage of the historic or back simulation model for quantifying market risk includes
calculation of a standard deviation of returns is not required.
all return distributions must be symmetric and normal.
the systematic risk of the trading positions is known.
there is a high degree of confidence when using small sample sizes.
None of the above.
2. The DEAR of a portfolio of assets is simply the weighted average of each individual assets' DEAR.
True
False
3. Assuming a discount rate of 10%, how much could you afford to pay now for $1,000 per year (payable at the end of each year, with the first payment a year from now) for (a) 5 years; (b) 10 years; (c) 20 years; (d) 30 years; (e) perpetuity (with Excel)?