The collapse of LTCM is a famous case of risk management. Which of the following statements is true?
A. LTCM had no active risk reporting.
B. At LTCM, stress testing became a risk management department exercise that had little influence on the firm's strategy.
C. LTCM failed to account properly for the illiquidity of its largest positions in its risk calculations.
D. LTCM's use of high leverage is evidence of poor risk management.
Answer：C
A major contributing factor to the collapse of LTCM is that it did not account properly for the illiquidity of its largest positions in its risk calculations.