Download the daily exchange rate from the Bank of England site.

a Calculate the daily percentage change in the exchange rate (decimal, i.e. 0.1 not 10 per cent).

b Rank the changes from positive down to negative. Apply VAR reasoning to the bottom 10 per cent of your sample.

c Assume that the distribution is normal and calculate the mean less 1.28 standard deviations and compare this figure with your answer to part

b. Comment on the assumption that the distribution is sufficiently normal to use parametric measures such as the standard deviation and not use the actual deviation. Compare your result with peers who have used different currencies.