VaR Discrete example, online classroom

[s1645544]

There is an example in the online tutorials that I am a bit confused about.

example
X = 1-year return in $ on an investment
X =
5,000 prob 0.9
-5,000 prob 0.05
-10,000 prob 0.04
-20,000 prob 0.01
answer
A: the solution says the 1-year 99% VaR = $10,000
I guess they get this from 5,000-5,000-10,000 = -10,000 as the respective probabilities 0.9+0.05+0.04 = 0.99.

However I don't understand why the solution isn't
B: the 1-year 99% VaR = $20,000
as we know the probability of getting a loss of 20,000 is 0.01, therefore can we not say
'We are 99% confident that losses will not exceed $20,000 next year"?

Please if someone could explain this to me / the difference in A and B that would be greatly appreciated.

Thanks in advance.

 

[CapitalActuary]

You can be 100% confident that you won’t get a loss bigger than 20,000 because the probabilities there add up to 1.

 

[s1645544]

thank you! this makes sense, i understand now