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PRMIA Exam 8010 Topic 4 Question 58 Discussion

Actual exam question for PRMIA's 8010 exam
Question #: 58
Topic #: 4
[All 8010 Questions]

Which of the following best describes the concept of marginal VaR of an asset in a portfolio:

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Suggested Answer: D

The correct answer is choice 'd'

Marginal VaR is just the change in total VaR from a $1 change in the value of the asset in the portfolio. All other answers are incorrect. Mathematically, it is expressed as follows, where VaRp is the VaR for the portfolio, and Vi is the value of the asset in question.

Other answers describe other VaR related concepts such as incremental VaR, Component VaR and Conditional VaR.


by Cecilia at Sep 15, 2024, 08:37 AM

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Cherrie
10 months ago
I'm not sure, but I think it might be C. The change in VaR estimate for the portfolio when including the asset.
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Golda
10 months ago
Option B seems like the way to go. After all, if the marginal VaR doesn't add up to the portfolio VaR, then how are we supposed to know how much each asset is contributing? It's like trying to bake a cake without the recipe.
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Shawna
8 months ago
User 4: Yeah, it's like each asset has its own impact on the overall risk of the portfolio.
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An
8 months ago
User 3: So, including an asset in the portfolio changes the VaR estimate? That makes sense.
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Peggie
8 months ago
User 2: Exactly, if the sum of all the assets' contributions doesn't add up to the portfolio VaR, then something's off.
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Twana
9 months ago
User 1: I think option B is correct. It's all about the contribution of the asset to the portfolio VaR.
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Moon
9 months ago
Option B it is then, understanding the marginal VaR is crucial for making informed investment decisions.
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Oren
9 months ago
Definitely, without knowing the contribution of each asset, it's hard to manage risk effectively.
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Bok
9 months ago
I agree, option B makes sense. It's all about understanding how each asset contributes to the overall risk of the portfolio.
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Latrice
10 months ago
I agree with Stanford, because Marginal VaR is about the contribution of the asset to portfolio VaR.
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Kathrine
10 months ago
Marginal VaR? More like 'Marginal Brain' am I right? Anyway, I'm going with option D because it sounds the most technical, and who doesn't love a good technicality?
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Hortencia
9 months ago
So, option D is the way to go for sure. It's all about those technical details when it comes to risk management.
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Margo
9 months ago
Exactly, it helps us understand how much risk is added or reduced by including that specific asset in the portfolio.
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Wilburn
9 months ago
That makes sense, it's like measuring the impact of a small change in the asset's value on the overall risk of the portfolio.
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Darrel
9 months ago
I think Marginal VaR is all about the change in total VaR resulting from a $1 change in the value of the asset in question.
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Keneth
10 months ago
Hmm, I was thinking option C, but now I'm not so sure. Maybe I should just flip a coin and hope for the best.
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Stanford
10 months ago
I think the answer is B.
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Essie
10 months ago
Ooh, this is a tricky one! I'm going to go with option B, because it just makes sense that the marginal VaR should be the contribution of each asset to the overall portfolio VaR.
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Adelaide
10 months ago
I agree, it's all about how each asset contributes to the overall portfolio VaR.
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Junita
10 months ago
I think you're right, option B does seem to make the most sense.
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