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Financial Risk Manager Part 2

Financial Risk Manager Part 2

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A chief risk officer at a leading financial institution is evaluating a proposal from an experienced risk analyst aimed at improving the firm's risk assessment processes. The analyst suggests simplifying the Value at Risk (VaR) calculation for the firm's large portfolio by consolidating the numerous trading positions into a smaller, more manageable set of core risk components. Which of the following methods would be the most appropriate for mapping the current positions?

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