Value at Risk (VaR)

The Value at Risk is a risk measure that calculates the maximum damage in a given time interval denoted with a certain probability. It is used frequently in risk management to calculate the specific risk eg. of the stock of wheat or a new contract. Correctly, one should, however, speak of the Value at Risk (VaR) by contracts from the cash flow at risk (CFaR). In colloquial language, however, the concept of Value at Risk (VaR) has become prevalent.

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