Q4: Scott Sanderson – Portfolio Optimization: Risk Preferences In, Trades Out
Chat With Traders
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How to Calculate Value at Risk
Most statistics gets a lot simpler to calculate if you assume that lots of things are normally distributed and normally The normal distribution is the nice bell curve that you see in on the front of every statistics book. In practice very very few things in finance are normally distributed. If you use an assumed normal distribution that estimate You know the conditional value of risk of your portfolio will just be way off from the actual amount you could expect to lose on your portfolio.
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