A major advantage of the historical simulation approach is that it is non-parametric, meaning it relies entirely on historical return data without requiring explicit assumptions about the underlying probability distribution. As a result, empirical features commonly found in financial data, such as fat tails (excess kurtosis) and skewness, are naturally and easily accommodated.

• Option A is incorrect because historical simulation is not definitively "more accurate" than parametric models; historical data may not be representative of future risks.
• Option B is incorrect because while increasing the sample size can reduce sampling error, it may include obsolete market events (ghost effects), thereby actually decreasing the model's responsiveness to recent new market conditions.
• Option C is incorrect because historical datasets only contain events that have already occurred, and cannot account for unprecedented structural shifts or changing market paradigms.