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Financial Risk Manager Part 2

Financial Risk Manager Part 2

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A financial institution has predominantly relied on Value at Risk (VaR) as its primary risk assessment tool. Given the recent market volatility, the institution is considering the adoption of Expected Shortfall (ES) as a potentially more effective alternative. Before transitioning from VaR to ES, what are the essential differences and key insights that need to be understood about both Value at Risk and Expected Shortfall?

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