Using market risk management (MRM)to identify the potential return per unit of risk in different areas by comparing returns to market risk so that more capital and resources can be directed to preferred trading areas is considered to be which of the following?

Question

Quizplus · Accepted Answer

Market risk management (MRM) is primarily concerned with allocating resources effectively by identifying the potential return per unit of risk in different areas. This helps managers direct more capital and resources to preferred trading areas, which falls under the category of resource allocation. Therefore, the correct answer is B. Regulation, management information, and setting limits are other important aspects of risk management, but they are not directly related to MRM in terms of capital allocation.

Using Market Risk Management (MRM)to Identify the Potential Return Per