List 2 Shortcomings of Using Value at Risk (VaR) as a Risk

question 10

Essay

List 2 shortcomings of using value at risk (VaR) as a risk management tool.

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Definitions:

Profit Margin

A financial metric used to assess a firm's financial health by revealing the percentage of money earned as profit.

Premium Price

Pricing goods or services higher than the market average to reflect their perceived extra value or quality.

Revenue Driver

Key factors or activities that significantly influence or contribute to the generation of income for a business.

Presales Costs

Expenses incurred during the preliminary phase of a sales process, such as market research, product development, and pitch preparation, before actual sales begin.