Question

I invested $10,000 in the stock of a vineyard. If there is frost for four days...

I invested $10,000 in the stock of a vineyard. If there is frost for four days in a row during the harvesting season, the chances of which are only 10%, the entire crop for the season will be wiped out and vineyard would lose 80% of its value. My value at risk is

Select one:

a. 10%

b. 20%

c. 100%

d. 80%

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Answer #1

In the given question as there is 10% chance of losing 80% of value. which means there is risk of loosing 80%

therefore value at risk is 80%.

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