The primary mechanism for estimating potential losses is mathematical methodology, value at risk ("VaR") which estimates the exposure to market risk:
Answer(s): A
Known limitations of VaR methodology include the fact that changes in market may not tend to normal distribution (specifically, that very large movements are more likely than predicated by the normal distribution assumption); BECAUSE:
Answer(s): D
Which one of the following is common misinterpretation during the calculation of VaR
Historical simulation and model based approach are the methods to calculate:
Answer(s): C
Default risk is an alternate term used for:
Answer(s): B
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