## Meaning of Monotonically decreasing

AMITAG1990
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### Meaning of Monotonically decreasing

Question.
Portfolio A has a 1-day, 95% VaR of \$5 million. Portfolio B has a 1-day, 95% VaR of \$7 million. Is it possible for the 1-day, 95% VaR of the combined portfolio (A + B) to be greater than \$12 million?
a. Yes, but only if the loss distribution for one portfolio is skewed to the right, and the loss distribution for the other is skewed to the left
b. No, never
c. Yes, but only if the positions in the two portfolios are perfectly correlated
d. Yes, but only if the tails of the loss distributions for A and B are not monotonically decreasing

-please explain me what is a meaning of monotonically decreasing, given in option D.

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### Re: Meaning of Monotonically decreasing

Monotonically decreasing means that it is decreasing consistently.

As in, at no point in time will it suddenly peak (increase).

content.pristine
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