Risk Management - Apollo - Practice questions

CFA Level III
#1

Based on the information in Exhibit 1 and assuming Mercury uses the analytical method for calculating VaR, which of Mercury’s industry-specific lending units most likely has the lowest annual VaR?

Energy Media and entertainment Technology

Sure, if you convert the 3 VaR to annual, you got the answer. Fast. Pretty simple.

However, if I agree the final answer, I disagree the method. Here we are comparing VaR with 3 confidence levels on 3 different assets.

Does it seems pragmatic for you?

We maybe should have first compute the 3 VaR with the same confidence level. This calculation lead to the same final results.

What do you think guys?

#2

That question has me puzzled too. I am looking forward for a coherent answer.

#3

If there were no confidence level mentionned, it would have been OK. But this is not the case

#4

https://www.analystforum.com/forums/cfa-forums/cfa-level-iii-forum/91342625

#5

This is funny as I jus did the question again (retaker…), and was questioning again on it, lol…

Following your link, I almost use the same reasoning than the other guy and I totally agree with him.

This is pretty confusing this issue of probability level.

Good luck everybody+++