Which one of the following correctly states the VaR for a 3-year period with a 2.5 percent probability? a) Prob[Rp, I E(Rp) x 3 - 1.960 x Op V3]
b) Prob[Rp, I S E(Rp) x 13 - 1.645 x Op 3]
c) Prob[Rp, T = E(Rp) x V3 - 1.960 x Op 3]

Option A

Prob[Rp,T ≤ E(Rp) × 3 - 1.960 × σp √3]

Step-by-step explanation:

It should be noted that, the VaR for a 3-year period with a 2.5 percent probability is Prob[Rp,T ≤ E(Rp) × 3 - 1.960 × σp √3]. Therefore, option A only is correct while other options are wrong

A: Prob[Rp, I E(Rp) x 3 - 1.960 x Op V3]

Step-by-step explanation:

1/800 is the right answer

the graph in the attached figure

step-by-step explanation:

we have

using a graphing tool

the graph in the attached figure

the roots are ( x-intercepts) x=-0.5,x=1,x=3

the y-intercept is the point (0,3)