I would say this is one of the worst articles I’ve read.
Bayers’ Rule and Value at Risk is not explained enough at all and did not mean anything to me.
Is there anyone who can help with some additional reading or explanation?
I would also be happy if the tutor would comment if these are examinable…
I’ve never come across VAR in P5, just P4. And Bayer’s rule, in none. They’re not even in the P5 book, so I guess it means it’s only for P4 students since the article was meant for both P4 and P5 papers. But just incase, you should take a look at the P5 syllabus.
I am worried that the examiner may see relevance in the value at risk in P 5, since changes in the environment can invalidate strategies. But how can it be asked as in question in P 5. My thinking is that it can be a disadvantage to whatever performance measure used.
According to the article #2VAR is a widely used measud of thr risk of loss on a specific portfolio of financial assets.
My guess it may be a short question related to scenario.
Hoping that it is not on the paper.
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