A company wants to calculate the Value at Risk (VaR) for its investment portfolio. The portfolio has a total value of $10,000,000 and is invested in two stocks, A and B. The company has historical data on the daily returns of the two stocks for the past year, which shows that the daily returns for stock A have a mean of 0.5% and a standard deviation of 1.2%, while the daily returns for stock B have a mean of 0.8% and a standard deviation of 1.5%. Assuming a normal distribution of returns, calculate the 5% VaR for the portfolio.

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The detailed answer for the above question is provided below To calculate the VaR for the portfolio we first need to calculate the daily returns and t... View the full answer