alleryStart learning →What to do about losses beyond ten times VaR?
AIgnore them completely
BReport them once a year
CTreat them as routine events
DHedge or insure them, or avoid
Answer & Solution
Correct answer: D. Hedge or insure them, or avoid
Foreseeable losses beyond ten times VaR are out of scale with daily experience, so they should be hedged, insured or avoided.
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