This question talks about adjustments you may need to make in the computation of VaR. 

(a) In a historical simulation algorithm for VaR, suppose the portfolio’s historical mean return is anticipated to be understated by 2%. What adjustment would you make in the simulation for determining the VaR in a new simulation run? Explain this in detail with the specific steps you would use. 

(b) In addition, suppose that the portfolio variance in the future is anticipated to be 1.5 times what it was in the past. Again, explain the specific modification to the simulation algorithm required to accommodate this feature.