Which of the Following Items Is Not Considered to Be

question 23

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.

---

Definitions:

Standards of the Industry

Refers to the commonly accepted criteria, techniques, and practices that are used in a specific sector or industry.

M'Naghten Standard

A legal principle used to evaluate the criminal liability of a defendant based on the understanding of right and wrong at the time of the crime.

Insanity

A legal term describing a person's inability to understand the wrongfulness of their actions due to mental illness at the time of a crime.

England

A country that is part of the United Kingdom, known for its rich history, diverse culture, and significant global influence.