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.

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Definitions:

Production

The process of creating goods and services through the combination of labor, materials, and technology.

Entrepreneurs

Individuals who organize, manage, and assume the risks of a business or enterprise, often introducing new products or services.

Production Techniques

The methods or processes used in the creation or manufacture of goods and services.

Costs

The expense required for something; the money spent on or needed for a project, product, or service.