a. Explain how total portfolio risk can be decomposed into various risk exposures, and indicate why risk

Question:

a. Explain how total risk can be decomposed into various risk exposures, and indicate why risk decomposition can be a complex exercise.
b. Explain what is meant by the term risk budgeting.
Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...