Given a text T, and several options, according to the question posed in the text T to choose the most appropriate option from the options as the answer, please directly output the most appropriate option, do not need to output the explanation.

Carol Kynnersley is the chief risk officer at Investment Management Advisers (IMA). Kynnersley meets with IMA's portfolio management team and investment advisers to discuss the methods used to measure and manage market risk and how risk metrics are presented in client reports.The three most popular investment funds offered by IMA are the Equity Opportunities, the Diversified Fixed Income, and the Alpha Core Equity. The Equity Opportunities Fund is composed of two exchange-traded funds: a broadly diversi-fied large-cap equity product and one devoted to energy stocks. Kynnersley makes the following statements regarding the risk management policies established for the Equity Opportunities portfolio:Statement 1 IMA's preferred approach to model value at risk (VaR) is to estimate expected returns, volatilities, and correlations under the assumption of a normal distribution.Statement 2 In last year's annual client performance report, IMA stated that a hypothetical $6 million Equity Opportunities Fund account had a daily 5% VaR of approximately 1.5% of portfolio value.Kynnersley informs the investment advisers that the risk management department recently updated the model for estimating the Equity Opportunities Fund VaR based on the information presented in Exhibit 1.
| Exhibit 1Equity Opportunities Fund一VaR Model Input Assumptions |
| Large-CapE TF | Energy ETF | Total Portfolio |
| Portfolio weight | 65.0% | 35.0% | 100.0% |
| Expected annual return | 12.0% | 18.0% | 14.1% |
| Standard deviation | 20.0% | 40.0% | 26.3% |
| Correlation between ETFs：0.90 |
| Number of trading days /year： 250 |


For clients interested in fixed-income products, IMA offers the Diversified Fixed-Income Fund. Kynnersley explains that the portfolio's bonds are all subject to interest rate risk. To demonstrate how fixed-income exposure measures can be used to identify and manage interest rate risk, Kynnersley distributes two exhibits featuring three hypothetical Treasury coupon bonds (Exhibit 2) under three interest rate scenarios (Exhibit 3).
| Exhibit 2Fixed-Income Risk Measure |
| Hypothetical Bond | Duration |
| Bond 1 | 1.3 |
| Bond 2 | 3.7 |
| Bond 3 | 10.2 |



| Exhibit 3： | Interest Rate Scenarios |
| Scenario | Interest Rate Environment |
| Scenario 1 | Rates increase 25bps |
| Scenario 2 | Rates increase 10bps |
| Scenario 3 | Rates decrease 20bps |


One of the investment advisers comments that a client recently asked about the performance of the Diversified Fixed-Income Fund relative to its benchmark, a broad fixed-income index. Kynnersley informs the adviser as follows:Statement 3 The Diversified Fixed-Income Fund manager monitors the historical deviation between portfolio returns and benchmark returns. The fund prospectus stipulates a target deviation from the bench-mark of no more than 5 bps.Kynnersley concludes the meeting by reviewing the constraints IMA imposes on securities included in the Alpha Core Equity Fund. The compliance department conducts daily oversight using numerous risk screens and, when indicated, notifies portfolio managers to make adjustments. Kynnersley makes the following statement:Statement 4 It is important that all clients investing in the fund be made aware of IMA's compliance measures. The Alpha Core Equity Fund restricts the exposure of individual securities to 1.75% of the total portfolio.
Based on Statement 1, IMA's VaR estimation approach is best described as the:
Option A:parametric method.
Option B:historical simulation method.
Option C:Monte Carlo simulation method.

Answer: A