An important risk that is often overlooked but has been the cause of the demise of some major financial institutions is value-at risk.

Question

Quizplus · Accepted Answer

Value-at-Risk (VaR) is a widely used risk management tool that estimates the potential loss in value of a portfolio over a defined period for a given confidence interval. Rather than being an overlooked risk, it is a method to quantify and manage risk. The demise of financial institutions is often due to inadequate risk management practices or failure to properly account for or understand the risks, rather than the concept of VaR itself.

An Important Risk That Is Often Overlooked but Has Been