6. The Fundamental Review of the Trading Book (FRTB)'s internal models approach requires banks to estimate stressed ES with a 97.5% confidence. FRTB requires banks to base their estimates on overlapping 10-day periods and use the cascade approach to calculating ES. a. Explain how to estimate ES using overlapping 10-day periods. (2 marks) b. Explain how to estimate ES using the cascade approach. (3 marks) 6. The Fundamental Review of the Trading Book (FRTB)'s internal models approach requires banks to estimate stressed ES with a 97.5% confidence. FRTB requires banks to base their estimates on overlapping 10-day periods and use the cascade approach to calculating ES. a. Explain how to estimate ES using overlapping 10-day periods. (2 marks) b. Explain how to estimate ES using the cascade approach