sample exam 1 q 28........SPOILER ALERT!!!!

is there a typo? V5 pg 261 since daily VAR are the same then they hve the same risk budget,

Geez, this is not even the gray box example…I think your title scared people away.:slight_smile:

:slight_smile: i shoulda said who wants 2000-2008 past papers?

bump anyone?

this is really strange, I only assume that the allocated capital plays the role (risk budget) as is written on page 260 second paragraph of this part, and it is typo on page 261. But I may be wrong.

I am glad I saw this post! I got the same issue in the sample exam. So basically, if 2 desks have the same allocated VAR, they do not have the same risk budget. Correct? The allocated capital AND acceptable level of Risk are determinants of the Risk budget?

i just took it this morning and the same issue appears, so i can only assume that the difference in capital allocated is the cause for a difference risk budget

I didn’t understand this one either. I thought there were two answers that were right.

Yeah me too. maybe risk budget is defined as a % of total assets hence why the risk budget of one is less than the other. Otherwise I have no clue, I put A as well.

I think it was just the “best answer” part. In that the total risk budget should be less than the sum even if it was a minor correlation. CFAI loves the “best answer.” I should have more or less known that is the answer they wanted.