CIMAPRO19-P03-1 Exam - Topic 2 Question 89 Discussion

Actual exam question for CIMA's CIMAPRO19-P03-1 exam

Question #: 89
Topic #: 2

[All CIMAPRO19-P03-1 Questions]

Which of the following best describes the relevance of value at risk (VaR) as a decision tool?

AVaR quantifies past volatility

BVaR quantifies future volatility

CVaR quantifies the maximum loss that could ever be incurred

DVaR can only measure downside risk

Show Suggested Answer

Suggested Answer: B, D, E

by Clarinda at Mar 24, 2025, 04:31 PM

Limited Time Offer

25%

Off

Get Premium CIMAPRO19-P03-1 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Wenona

4 months ago

Wait, can it really measure the maximum loss? Sounds off.

upvoted 0 times

...

Walker

4 months ago

I think it can give insights into future risks too.

upvoted 0 times

...

Breana

4 months ago

Yeah, it mainly focuses on downside risk, for sure.

upvoted 0 times

...

Dierdre

4 months ago

Totally agree, it doesn't predict the future!

upvoted 0 times

...

Felix

5 months ago

VaR is all about past volatility.

upvoted 0 times

...

Miss

5 months ago

I vaguely remember that VaR is mainly about downside risk, but I wonder if it can also account for other types of risk.

upvoted 0 times

...

Lanie

5 months ago

I feel like VaR is more about measuring potential losses, but I can't recall if it really captures the maximum loss possible.

upvoted 0 times

...

Phillip

5 months ago

I think I saw a similar question about VaR in practice exams, and I leaned towards it quantifying future volatility.

upvoted 0 times

...

Kenneth

6 months ago

I remember VaR is supposed to help with risk assessment, but I'm not sure if it focuses on past or future volatility.

upvoted 0 times

...

Jarvis

6 months ago

This question is tricky. I know VaR is a risk management tool, but I'm not entirely clear on the specifics. I'll make an educated guess and go with B, but I'm not 100% confident.

upvoted 0 times

...

Graham

6 months ago

Okay, let me see. VaR is a measure of downside risk, so it can't be C or D. I'm leaning towards B, but I'll double-check the definitions just to be sure.

upvoted 0 times

...

Reid

6 months ago

Hmm, I'm a bit unsure about this. I know VaR has something to do with risk, but I can't remember if it's past or future volatility. I'll have to think this through carefully.

upvoted 0 times

...

Penney

6 months ago

I'm pretty confident on this one. VaR is all about quantifying future volatility, so I think the answer is B.

upvoted 0 times

...

Tracey

11 months ago

VaR? More like 'Volatility, Anxiety, and Regret,' am I right? This exam question is giving me all the feels.

upvoted 0 times

...

Melynda

11 months ago

Wait, so VaR doesn't measure the maximum loss that could ever be incurred? That's like saying a parachute doesn't guarantee a safe landing. What's the point then?

upvoted 0 times

Izetta

10 months ago

D) VaR can only measure downside risk

upvoted 0 times

...

Gail

10 months ago

C) VaR quantifies the maximum loss that could ever be incurred

upvoted 0 times

...

Nada

10 months ago

A) VaR quantifies past volatility

upvoted 0 times

...

Karl

11 months ago

VaR can only measure downside risk? That's a bit of a bummer. I was hoping it could tell me about the upside potential too. Oh well, can't have it all I guess.

upvoted 0 times

...