What Is Value At Risk (VAR)?

Value-at-Risk orVARis a financial technique developed in the late 90s byJPMorgan. It is used to estimate the total possible loss for a day's activity within a financial firm.VARis calculated using historical data on risk, volatility and price movements. The problem is that it ignores the extremes (assuming the performance has a normal distribution) and these tail-risks are the ones that can bankrupt an institution very quickly. For general day-to-day activities however,VARis quite useful and accurate.

To learn more about this concept and become a master at Financial Statement modeling, you should check out our FSM Modeling Course.Learn more here.

Module 1: Getting Started

Module 2: Fundamental Concepts

Module 3: The Income Statement

Module 4: Working Capital

Module 5: PP&E and Intangibles

Module 6: The Cash Flow Statement

Module 7: Debt & Interest Schedule

第八模块:完成你的模型

Module 9: Bonus

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Related Terms

• Volatility

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