Economics Risk And Return Questions
Conditional Value at Risk (CVaR) is a risk measure that quantifies the potential loss beyond a certain confidence level. It represents the expected value of the worst outcomes that occur beyond a specified threshold. In other words, CVaR provides an estimate of the average loss that an investor may face if the portfolio's returns fall below a certain level, typically at a specified confidence level. It is a useful tool for assessing and managing downside risk in investment portfolios.