Para Jumble practice question for SSC. Review the correct answer and explanation, then continue with related practice below.
Arrange the following sentences in the correct order. A. A bank's risk model assumes that losses in different regions are largely independent. B. During a nationwide recession, however, losses rise simultaneously across many regions. C. Diversification provides less protection than the model predicted. D. Correlations that appear low during ordinary periods may therefore increase sharply during systemic shocks.
Correct Answerसही उत्तर
A. ABCD
Explanationव्याख्या
(English): A introduces the independence assumption.
B shows that a nationwide recession creates simultaneous losses.
C gives the failure of expected diversification.
D provides the general lesson about changing correlations.
Overall Meaning: Diversification may provide less protection during crises because normally separate risks can become correlated.
व्याख्या (Hindi): A regional losses के independent होने की assumption बताता है।
B nationwide recession में simultaneous losses की बात करता है।
C diversification के expected protection से कम effective होने का result देता है और D systemic shocks के दौरान correlations बढ़ने का निष्कर्ष देता है।
समग्र अर्थ: Crisis के समय अलग-अलग दिखाई देने वाली risks correlated हो सकती हैं, जिससे diversification का protection कम हो जाता है।
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