A Major Problem with VaR Analysis Is That

question 49

Multiple Choice

A major problem with VaR analysis is that

• A) it does not indicate the maximum possible loss.
• B) it only works for individual assets rather than portfolios.
• C) regulators do not understand VaR and so they don't allow its use.
• D) it encourages excessive risk taking since it does not correctly account for asset correlations.

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