Explanation:
The incident involving Barclays Capital and Lehman Brothers underscores the importance of thorough review and challenge, even for tools and models that may appear simple on the surface.
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Q.5155 In September 2008, Lehman Brothers collapsed, sparking the 2008 global financial crisis. In one incident not known to many, Barclays Capital almost bought 179 trading contracts from Lehman Brothers by accident. Which of the following lessons can be learned from this incident?
A
MRM should challenge the assumptions and ensure users understand related limitations
B
Even tools and models that seem so simple should be challenged and reviewed properly
C
Even small errors, such as the use of wrong units, can lead to massive losses
D
A good MRM should help minimize the misuse of models by helping users understand the limitations accompanying a model
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