49 th MCQ
And what is the difference between safety first ratio and shortfall risk ?
please can anyone elaborate and also 49th MCQ ?
Please briefly explain why you feel this question should be reported.
Please briefly explain why you feel this answer should be reported.
Please briefly explain why you feel this user should be reported.
Safety First Ratio= (E(R) – Rmin)/SD
The portfolio which has the highest SFR is the optimum portfolio.
Short Fall Risk is in % terms ki kya chances hai ki portfolio ka return 2% (jo uska threshold return hai) neeche aye
Since Safety First Ratio is already given (which is 1.3) so we just need to find the value in Z table
We are interested in finding the probability on left side of the distribution
The value of Z (-1.3) comes at .0968=9.68% chances hai ki return 2% se kam ho sakta hai
Hope it helps.
Safety first ratio is = {E(r)-Rmin}\SD
And in simple words shortfall risk is how much chances there that our return can be lower than threshold
Kitne percent chnace h ki port. Ret. Threshold ret. Se b niche aayega .(i.e 2% ) in our question and Safety first ratio is given 1.3 look for this value in Z table (left side )
Then we will get .968