Value at Risk (VAR) has become a key concept in financial calculations. The VAR of an investment is defined as that value v such that there is only a 1 percent chance that the loss from the investment will be greater than v. (a) If the gain from an investment is a normal random variable with mean 10 and variance 49 determine the VAR. (IfX is the gain, then ?X is the loss.)
(b) Among a set of investments all of whose gains are normally distributed, show that the one having the smallest VAR is the one having the largest value of mean minus standard deviation*2.33?

Var = 6.31

Step-by-step explanation:

The Value at Risk (VAR)

By using normal distribution

Mean = 10

Variance = 49

Standard deviation

This implies that:

Using the z-table;

Hence, there exist 1% chance that X < -6.31 or the loss from investment is > 6.31

From the calculated value above;

; Since the result is negative, then it shows that the greater the value(i.e the positive or less negative it is ) the lower is the value of VAR. Thus, the least value of VAR is accepted by  the largest value of

none cuz there are no "following statements" regarding the question

step-by-step explanation: