Which of these statements regarding risk factor mapping approaches is/are corr

Which of these statements regarding risk factor mapping approaches is/are correct?

I. Under the cash flow (CF) mapping approach only the risk associated with the average maturity of a fixed-income portfolio is mapped.

II. Cash flow mapping is the least precise method of risk mapping for a fixed-income portfolio.

III. Under the duration mapping approach the risk of a bond is mapped to a zero-coupon bond of the same duration.

IV. Using more risk factors generally leads to better risk measurement but also requires more time to be devoted to the modeling process and risk
computation.

A. I and II

B. I III and IV

C. I I I and IV

D. IV only