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:

Dodd-Frank Act

A comprehensive and complex piece of financial regulation in the United States, enacted in 2010 to prevent the recurrence of financial crises.

Clawback

A provision under which money already paid must be returned, often used in employment contracts for the return of bonuses or in investment agreements.

Whistleblower

An individual who exposes any kind of information or activity that is deemed illegal, unethical, or not correct within an organization.

Net Loss

Refers to the situation where a company's expenses exceed its revenues within a specific accounting period, leading to a negative income.