Which of the Following Isnot a Reason to Favor the Top-Down

Multiple Choice

Which of the following isnot a reason to favor the top-down approach to modeling correlated default versus the bottom-up approach?

A) The loss distribution in simple cases is easy to compute in closed-form.
B) The computational complexity of the top-down approach is far less than that of the bottom-up one.
C) It is easier to model CDOs on CDOs.
D) It enables breaking down the portfolio loss name by name.