Which statement about VaR is correct?

A. A VaR captures the occurrence of extreme events.
B. VaR is a worst-case scenario.
C. VaR can be used to compare risk between stocks and bonds.

Correct Answer: C

A is false. It very often underestimates the frequency of left-tail events. B is false. Losses can exceed VaR.

C is correct. It is useful in comparing risks across asset classes.