1. 

   Harashima Senju Ton up Member

   Why is the VaR at 10% equal to 5? Shouldn't it be equal to 4 apples

    

   Harashima Senju, Sep 18, 2017

   #1
2. 

   John Potter ActEd Tutor Staff Member

   Hi Harashima,
   
   The VaR corresponds to the maximum x, such that P[X<x] <10%
   P[X < 5] = 0.0963 < 10%
   P[X < 6] = 0.1912 > 10%
   So, x=5.
   
   Because this is a positive number of apples, the VaR is minus 5 apples
   
   Good luck!
   John

    

   John Potter, Sep 19, 2017

   #2

   Harashima Senju likes this.

Your name or email address:

Do you already have an account?

• No, create an account now.
• Yes, my password is:
• Forgot your password?

Stay logged in