Explanation:
Individual VaR is the Value-at-Risk of an individual component or position computed in isolation, meaning every component is evaluated separately without considering the diversification benefits achieved when combined into a portfolio.
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Q.4710 Which one of the following correctly describes individual VaR?
A
It explains VaR in terms of change in position in a portfolio.
B
Every component is taken separately under the approach.
C
It takes to consideration diversification benefits between components.
D
It is to the additional amount of risk that new security adds to an existing portfolio.
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