Question 1

why might regulators prefer using Value at Risk (VaR) over other risk measures?

a-Because VaR provides a more accurate measure of return on investment.

b-Because VaR offers a clear, quantifiable measure of potential loss at a given confidence level.

c-Because VaR considers only past data.

d-Because VaR is easier to calculate.

Question 2

To calculate Value at Risk (VaR), which confidence level is most commonly applied according to the lecture?

a-85%

b-99%

c-90%

d-95%

Question 3

Question 3

What does the lecture suggest is necessary to decide when calculating VaR, besides the confidence level?

a-The holding period for the risk calculation.

b-The type of assets in the portfolio.

c-The current market volatility.

d-The total value of the investment portfolio.

Question 4

What does the calculated 1% VaR of $5.8 million for the loan portfolio illustrate in terms of risk management?

a-That default probabilities are irrelevant when calculating VaR for a portfolio.

b-That combining loans into a portfolio can result in a higher VaR than the sum of individual VaRs.

c-That the sum of individual VaRs equals the portfolio VaR.

d-That the profit from one loan can offset the VaR of the entire portfolio.

Question 5

According to the lecture, why do regulators require firms to calculate expected shortfall in addition to VaR?

a-Because expected shortfall captures the expected loss conditional on the VaR being exceeded.

b-Because expected shortfall is less sensitive to "fat tails".

c-Because expected shortfall is easier to calculate than VaR.

d-Because expected shortfall provides a more conservative estimate of risk.

Question 6

According to the lecture, what is a critical factor in team decision-making and managing conflicts?

a-Following the most experienced team member's lead.

b-Understanding power and influence dynamics within the team.

c-Having the most data.

d-Avoiding any form of disagreement.

Question 7

The lecture compares preparation for team decision-making and conflict management to which activity, emphasizing the importance of safety and preparedness?

a-Sailing.

b-Playing chess.

c-Rock climbing.

d-Running a marathon.

Question 8

What psychological effect is mentioned as influencing team decision-making, especially under stress?

a-The halo effect.

b-Confirmation bias.

c-Cortisol limiting trust and decision quality.

d-Optimism bias.

Question 9

According to Moshe Cohen, what role does empathy play in negotiations?

a-It only matters in personal negotiations, not in professional settings.

b-It helps in understanding the other party's perspective and creating a constructive dialogue.

c-It is irrelevant and often distracts from the main objectives.

D-It weakens one's position by making them too accommodating.

Bottom of Form

Question 10

What concept is used to describe the tendency to continue investing in a bad decision?

a-Cognitive dissonance.

b-Escalation of commitment.

c-Loss aversion.

d-Confirmation bias.