CFA Practice Question

There are 119 practice questions for this study session.

CFA Practice Question

Which method of VaR estimation is the LEAST suitable for accommodating options?
A. The parametric method
B. The historical simulation method
C. The Monte Carlo simulation method
Explanation: The parametric method assumes normal distribution. It can be difficult to use when there are options involved because non-exercised options can truncate the distribution curve.

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