Which of the Following Items Is Not Considered to Be

question 95

Multiple Choice

Which of the following items is not considered to be an advantage of using back simulation over the RiskMetrics approach in developing market risk models?

• A)Back simulation is less complex.
• B)Back simulation creates a higher degree of confidence in the estimates.
• C)Asset returns do not need to be normally distributed.
• D)The correlation matrix does not need to be calculated.
• E)A worst-case scenario value is determined by back simulation.

---

Definitions:

Hypostyle Hall

A large room with a roof supported by rows of columns, commonly found in ancient Egyptian temples but also used in other ancient architectures.

Column Capitals

The topmost part of a column, which transitions from the vertical shaft to the horizontal load it supports, often elaborately decorated according to different architectural orders such as Doric, Ionic, and Corinthian.

Lotus

A symbolic flower in various cultures, often associated with purity and enlightenment, particularly within Hinduism and Buddhism.

Fresco Secco

A wall painting technique where pigments mixed with binders are applied onto dry plaster.