Assume an FI's Daily Earnings at Risk Are $5000 and That

Multiple Choice

Assume an FI's daily earnings at risk are $5000 and that the FI is required to hold its position for 10 days. What is the position's VAR (round to two decimals) ?

A) $5000 $\times$ $\sqrt{10}$ = $15 811.39
B) $5000 $\times$ $\sqrt{(10 - 1) }$ = $15 000.00
C) $\sqrt{\$5000}$ $\times$ 10 = $707.11
D) $\sqrt{\$5000}$ $\times$ (10 - 1) = $636.40