According to the Group of 30 Report, deriving aggregate potential credit exposure for a counterparty by adding up the potential exposure of multiple transactions:

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According to the Group of 30 Report, deriving aggregate potential credit exposure for a counterparty by adding up the potential exposure of multiple transactions:
A . Gives an accurate result in most cases
B . Captures portfolio effects but not tenor differences
C . Can easily reflect the impact of netting
D . Overstates exposure in most cases

Answer: D