value at risk

Value at Risk (VaR) is a way to measure how much money you could possibly lose when you invest in something. It lets you know how much you can lose in one day. To figure it out, you need to think about all the possible risks associated with the investment. For example, the stock market can go up and down, the value of currency can change, and natural disasters can happen. All these risks can affect your investment. VaR helps you understand how much you can lose in a certain amount of time so you can make decisions about how to invest your money.