- CFA Exams
- 2025 Level II
- Topic 9. Portfolio Management
- Learning Module 41. Measuring and Managing Market Risk
- Subject 3. Using Constraints in Market Risk Management
Why should I choose AnalystNotes?
Simply put: AnalystNotes offers the best value and the best product available to help you pass your exams.
Subject 3. Using Constraints in Market Risk Management PDF Download
Constraints are widely used in risk management. Risk measurements and constraints in and of themselves are not restrictive or unrestrictive; it is the limits placed on the measures that drive action.
Risk budgeting is the allocation of the total risk appetite across sub-portfolios.
Position limits are limits on the market value of any given investment.
A scenario limit is a limit on the estimated loss for a given scenario, which, if exceeded, would require corrective action in the portfolio.
A stop-loss limit requires a reduction in the size of a portfolio, or its complete liquidation, when a loss of a particular size occurs in a specified period.
User Contributed Comments 0
You need to log in first to add your comment.
I just wanted to share the good news that I passed CFA Level I!!! Thank you for your help - I think the online question bank helped cut the clutter and made a positive difference.
Edward Liu
My Own Flashcard
No flashcard found. Add a private flashcard for the subject.
Add