10-43 Market risk measurement considers the return-risk ratio of traders,which may allow a more rational compensation system to be put in place.Thus MRM aids in

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Market risk measurement (MRM) aids in performance evaluation by providing a way to measure the return-risk ratio of traders. This can lead to a more rational compensation system, which can incentivize traders to take risks that are more in line with the goals of the organization. While MRM may also be useful for regulation, resource allocation, management information, and setting limits, the question specifically asks for the best choice, which is performance evaluation.

10-43 Market Risk Measurement Considers the Return-Risk Ratio of Traders,which