In the context provided, where a bank’s derivative trading desk currently employs a Value at Risk (VaR) model that utilizes historical simulation with a 3-year look-back period and applies equal weighting to past returns, a new VaR model has been developed. This new model employs the delta-normal method, where volatilities and correlations are estimated using the RiskMetrics Exponentially Weighted Moving Average (EWMA) method over the past 4 years. During a 6-week parallel run, the new model reported no exceedances and consistently estimated lower VaR values compared to the old model. Following this, the model evaluation team, after a brief assessment led by a junior analyst, quickly decided to adopt the new model. Given this scenario, what is the correct conclusion to draw regarding the model replacement?