CFA Practice Question

There are 119 practice questions for this study session.

CFA Practice Question

One limitation of VaR is its failure to take into account ______.

A. volatility
B. liquidity
C. correlation
Correct Answer: B

VaR could underestimate the magnitude of potential losses when some assets are relatively illiquid (e.g., portfolio positions are too large relative to the available market illiquidity).

User Contributed Comments 0

You need to log in first to add your comment.