A Disadvantage of the Historic or Back Simulation Model for Quantifying

question 35

Multiple Choice

A disadvantage of the historic or back simulation model for quantifying market risk includes

• A)calculation of a standard deviation of returns is not required.
• B)calculation of the correlation between asset returns is not required.
• C)estimates of past returns used in the model may not be relevant to the current market returns.
• D)it accounts for non-standard return distributions.
• E)None of the above.

---

Definitions:

Achievement Motivation

The drive to excel, achieve in relation to a set of standards, or strive to succeed.

TAT

Thematic Apperception Test, a projective psychological test used to reveal a person's social drives or needs by their interpretation of ambiguous images.

Locus of Control

is a psychological concept that refers to individuals’ belief in their ability to control events affecting them, classified as either internal (belief in personal control) or external (belief that external forces dominate).

External

Relating to, situated on, or coming from outside a particular place or entity.