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A senior risk analyst at a large investment bank is proposing to the CRO a plan to improve the efficiency of the bank's risk measurement system. The analyst suggests simplifying the bank's portfolio VaR estimation process by mapping the bank's large number of trading positions to a smaller number of elementary risk factors. Which of the following is the most appropriate way of mapping the given position?
A
Mapping USD/EUR forward contracts to the USD/EUR spot exchange rate.
B
Mapping each position in a corporate bond portfolio to the bond with the closest maturity among a set of government bonds.
C
Mapping zero-coupon government bonds to government bonds paying regular coupons.
D
Mapping a position in a stock market index to a position in a stock within that index.