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2014-05-07
To control risk-taking by traders, your bank links trader compensation with their
compliance with imposed VaR limits on their trading book. Why should your bank be careful in tying compensation to the VaR of each trader?
A. It encourages trader to select positions with high estimated risks, which leads to an underestimation of the VaR limits.
B. It encourages trader to select positions with high estimated risks, which leads to an overestimation of the VaR limits.
C. It encourages trader to select positions with low estimated risks, which leads to an underestimation of the VaR limits.
D. It encourages trader to select positions with low estimated risks, which leads to an overestimation of the VaR limits

给的答案选C,请大神帮忙解释一下为什么?谢谢啦!!

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