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Basic Question 1 of 3

A bank allows its North American business to use 60% of its market risk capital and 40% of its credit risk capital. This is an example of ______.

A. risk budgeting
B. risk limiting
C. risk positioning

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You have a wonderful website and definitely should take some credit for your members' outstanding grades.
Colin Sampaleanu

Colin Sampaleanu

Learning Outcome Statements

explain constraints used in managing market risks, including risk budgeting, position limits, scenario limits, and stop-loss limits;

explain how risk measures may be used in capital allocation decisions.

CFA® 2025 Level II Curriculum, Volume 5, Module 41.