Introduction to Value at Risk (VAR) - Part 2 of 2

Topics:
Insurance
Tags:
Finance,
Investment,
Investopedia,
Value At Risk
Source:
Investopedia

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Overview: This article discusses on the information regarding Risk Management. Value at Risk (VAR or VaR) is a special type of downside risk measure. Rather than produce a single statistic or express absolute certainty, it makes a probabilistic estimate. With a given confidence level, it asks, "What is the maximum expected loss over a specified time period?" There are three methods by which VAR can be calculated: the historical simulation, the variance-covariance method, and the Monte Carlo simulation.

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Format: HTML | Date: Oct 2004 | Pages: 5

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