What is the meaning of var

An Introduction to Value at Risk (VAR)

What is the meaning of var

what is the meaning of var

Value at risk

Mar 30,  · Value at risk (VaR) is a statistic that measures and quantifies the level of financial risk within a firm, portfolio or position over a specific time frame. This metric is . Var meaning VAR is an abbreviation for Value at Risk, a financial term that is used to measure the risk of loss on a portfolio of investments. An example of VaR is .

Value at risk VaR is a statistic that measures and quantifies the level of financial risk thd a firm, portfolio or position over a specific time frame.

This metric is most commonly used by investment and commercial banks to determine the extent and occurrence ratio of potential losses in their institutional portfolios. Risk mraning use VaR to measure and control the level of risk exposure.

How to essay topics for college can apply VaR calculations to specific positions or whole portfolios or to measure firm-wide risk exposure. VaR modeling determines the potential for loss in the entity being assessed and tye probability of occurrence for the defined loss. One measures VaR by assessing the amount of potential loss, the probability mesning occurrence for the amount of loss, and the timeframe.

Investment banks commonly apply VaR modeling to firm-wide risk due to the potential for independent trading desks to unintentionally expose the firm to highly correlated assets.

Using a firm-wide VaR assessment allows for the determination of the cumulative risks from aggregated positions held by different trading desks and departments within the institution. Using the data provided by VaR modeling, financial institutions can determine what is the meaning of var they maening sufficient capital reserves in place to cover losses or whether higher-than-acceptable risks require them to reduce concentrated holdings.

There is no standard protocol for the statistics used to determine asset, portfolio or firm-wide risk. For example, statistics pulled arbitrarily from a period of vra volatility may ahat the potential for risk events to occur and the magnitude of those events. Meaninb may be further understated using normal distribution probabilities, which rarely account for extreme or black-swan events.

The assessment of potential loss represents the lowest amount of risk in a range of outcomes. The financial crisis of that exposed these problems as relatively benign VaR calculations understated the potential occurrence of risk events posed by portfolios of subprime mortgages. Risk magnitude was also underestimated, which resulted waht extreme leverage ratios within subprime portfolios. As a result, the underestimations of occurrence and risk magnitude left institutions unable to cover billions of dollars in losses as subprime mortgage values collapsed.

Financial Crisis Inquiry Commission. Accessed July 24, Risk Management. Portfolio Management. Tools for Fundamental Analysis. Business Essentials. Your Money. Personal Finance. Your Practice. Popular Courses. Financial Ratios Guide to Financial Ratios. Key Takeaways Value at risk VaR is a statistic that measures and quantifies the level of financial risk within a firm, portfolio or position over a specific time frame.

Article Sources. Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts.

We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased meanint in our editorial policy.

Compare Accounts. The offers that appear in this table are from partnerships from which Investopedia receives compensation. Related Terms How Risk Analysis Works Risk analysis is the process of assessing the likelihood of an adverse event occurring within the corporate, government, or environmental sector. Marginal VaR Definition Marginal VaR estimates the change in portfolio VaR resulting from taking an additional dollar of exposure to a given component.

Market Risk Definition Market risk is the possibility of an ,eaning experiencing losses due to factors that affect the overall performance of the financial markets. Risk Risk takes on many forms but is broadly categorized as the chance whats the meaning of colors outcome or investment's actual return will differ from the expected outcome or return.

Risk Management in Finance In the financial world, risk management is the process of identification, analysis, and tje or mitigation of uncertainty in investment decisions.

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Definition; VAR: Value-Added Reseller (usually of technology products) VAR: Variable/Variation: VAR: Variety: VAR: Variant: VAR: Value At Risk: VAR: Video Assistant Referee: VAR: Value Added Reseller: VAR: Vulnerability Assessment Report: VAR: Various Routes of Administration (drugs) VAR: Volt-Ampere Reactive: VAR: Variance Analysis Report: VAR: Visual Anthropology Review (journal) VAR: Variable. Aug 19,  · Value at Risk (VAR) calculates the maximum loss expected (or worst case scenario) on an investment, over a given time period and given a specified degree of confidence. We looked at . var is Implicit type which means system will define the data type itself. The compiler will infer its type based on the value to the right of the "=" operator. int/string etc. are the explicit types as it is defined by you explicitly. Var can only be defined in a method as a local variable.

An example of a VAR is a company that assembles audio and video parts to create a home entertainment system. The name Var una may be Indo-European, identifiable, some believe, with the Greek ofpavos Uranus , and ultimately referable to a root var , " to cover," Var una thus meaning "the Encompasser. The small independent river, the Var , drains that portion of the Alps which fringes the Mediterranean.

Home Dictionary Meanings Var. Var meaning. Filters 0. VAR is an abbreviation for Value at Risk, a financial term that is used to measure the risk of loss on a portfolio of investments. Value-added reseller. Value at risk. The unit used to measure the apparent power in an alternating-current circuit, equal to one volt-ampere or one watt. Variant s. Visual-aural radio range.

V alue A dded R eseller An organization that adds value to a system and resells it. For example, it could purchase a CPU and peripherals from different vendors, graphics software from another and package it all together as a specialized CAD system. Although VARs typically repackage products, they might also include programs they have developed themselves.

A company that builds products or systems incorporating components or products that are manufactured by another company commonly referred to as an original equipment manufacturer OEM. A manufacturer of laptop or tablet computers, for example, might incorporate an Ethernet network interface card NIC , built by an OEM to its specifications. A business that re-sells goods , especially with some additional service, such as selection assistance, installation, or support.

Alternative spelling of VaR. VAR is defined as a value-added reseller, a company that adds something to an existing product to increase its value. Var Sentence Examples. Var 2, , , Related articles.

Also Mentioned In. Words near var in the Dictionary.

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