While the recent incidents of catastrophic business failures and Basel II requirements of capital charge for operational risk have increased awareness about the latter, it has also sparked a debate on its measurement as well as its management. This is an analysis of the compelling reasons for an...

Value at Risk (VaR) is a new technology in financial engineering which helps to measure the risk in the financial world. It can be defined as the maximum possible loss associated with a financial instrument within a given period of time and with a given confidence level. This VaR methodology...