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Financial Risk Manager Part 2

Financial Risk Manager Part 2

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An analyst at a bank is asked to evaluate the efficacy of the VaR model that the bank used over the last year. While evaluating the model, the analyst finds that the bank experienced more VaR exceptions than were forecast by the bank's VaR model and examines both the reason this occurred and its potential impact on the bank. Which of the following is correct regarding the analyst's examination of the situation?

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