C IS CORRECT. PARAMETRIC METHOD IS DIFFICULT TO USE WHEN PORTFOLIOS...

4. C is correct. Parametric method is difficult to use when portfolios consist of options because

of the non-normal distribution followed by options. Monte Carlo method can use any

distribution and the historical simulation method uses data that actually happened hence these

methods are not limited by the assumption of a normal distribution. Hence, A and B are

incorrect. Section 2.2.3. LO.b.