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NEW QUESTION: 1
Which of the following statements represents a methodological difference between variance-covariance and
full revaluation methods?
A. Variance-covariance approach prices positions more accurately than the full revaluation approach.
B. Variance-covariance approach computes the VAR for each position separately, while the full revaluation
method computes the VAR on a portfolio basis.
C. Variance-covariance approach provides computational advantages over the full revaluation approach.
D. Variance-covariance approach uses only historic data to compute the covariance matrix.
Answer: C

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