In the context of financial risk management, specifically when dealing with the formulation of a risk plan or a risk budget, which of the following statements is most accurate?

Exam-Like

The risk budget should define acceptable levels of return on risk capital (RORC) for each risk capital allocation.

21.8%

The risk budget should identify the firm's critical dependencies regarding funding and investment performance.

13.8%

The risk plan should state exactly how risk capital should be allocated among asset classes.

19.5%

The risk plan should set volatility goals such as VaR or tracking error for relevant time periods.

44.8%

Financial Risk Manager Part 2