Value at risk var is a measure that attempts to capture the


Value at Risk (VaR) is a measure that attempts to capture the risk within a firm or investment portfolios. One way of calculating VaR assumes that daily returns are distributed according to a Normal distribution. With high confidence (95%), we can then calculate the VaR as 1.65 standard deviations below the mean. This approach has been criticized following the financial crisis of 2008. Can you think of reasons why?

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Finance Basics: Value at risk var is a measure that attempts to capture the
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