Risk budgeting is a: A. bottom-up process and is forward looking. B. top-down process and is backward looking. C. top-down process and is forward looking. D. bottom-up process and is backward looking.
Risk budgeting is a top-down process that involves choosing and managing exposures to risk. It builds upon the VAR measure, is forward-looking, and can apply to asset managers, classes of assets, and individual securities.
