Find the value at risk? (VaR) for an investment of?
Added by Bryan L.
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Step 1: Calculate the value at risk (VaR) for an investment of $25,440. Show more…
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(a) Find the value at risk (VaR) for an investment of $600,000 at 1%. (That is, find out how low the value of this investment could be if the worst 1% of outcomes are ruled out.) The investment is expected to grow during the year by 12% with SD 37%. Assume a normal model for the change in value.(b) How much smaller would the annual SD of the investment need to become in order to reduce the VaR to $300,000? Assume that the expected growth remains 12%.(a) The value at risk (VaR) for an investment of $600,000 at 1% is $(Round to the nearest thousand dollars as needed.)(b) The annual SD of the investment would need to become %.(Round to four decimal places as needed.)
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(a) Find the value at risk (VaR) for an investment of $100,000 at 5%. (That is, find out how low the value of this investment could be if the worst 5% of outcomes are ruled out.) The investment is expected to grow during the year by 8% with SD 20%. Assume a normal model for the change in value. (b) To reduce the VaR to $12,000, how much more expected growth would be necessary? Assume that the SD of the growth remains 20%. (a) The value at risk (VaR) for an investment of $100,000 at 5% is $ . (Round to the nearest thousand dollars as needed.) (b) The necessary expected growth to reduce the VaR to $12,000 is %. (Round to the nearest percent as needed.)
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