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Monte Carlo Is Widely-Used Approach for Computing VaR

Question 25

Multiple Choice

Monte Carlo is widely-used approach for computing VaR. Relative to other methods which of the following is a benefit of using this approach?


A) It is fully flexible in parameterizing the forward-looking distribution.
B) It always requires very few parameters.
C) It always uses normality.
D) It is the fastest approach to computing VaR.

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