The benefits offered by the value-at-risk methodology include:

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Value-at-risk (VaR) methodology is appreciated for its simplicity in providing a single number that sums up the risk of an entire portfolio, making it easier to understand and communicate. Additionally, its straightforwardness and quantifiable nature make it suitable for setting risk limits, helping organizations manage and mitigate risk effectively. However, its accuracy can be debated, as it relies on historical data and assumptions that may not always capture future risks accurately.

The Benefits Offered by the Value-At-Risk Methodology Include