5. Bond VaR: (15 points) of the bond is 98.50%. Standard deviation of 1- day price change is 0.20% (0.0020). Principal amount: S15,000,000. Current percentage-of-par price Average 1-day change in the bond price is +0.020% (+4002). Compute the 1-day VaR of this holding using a 0.99 confidence level (.confidence= 2.520 Do you include Expected Loss in your calculation? Explain why or why not? Portfolio VaR: (20 points) Your investment firm has a portfolio made up of the stocks in questions 4 and the bonds inquestion 5. The correlation coefficient between them k ond is Calculate the standard deviation of the 1-day changes in portfolio value (the square root of the portfolio variance), then compute the 1-day VaR of the portfolio using a 0.99 confidence level ("confidence= 2.326). If you include expected loss, include both the stocks and the bonds using the expected price change and the exposures for both parts of the portfolio. 7. In question 6 you calculated 1-day Value at Risk for your portfolio. Based on that20 points) a. Explain to a non-financial-specialist acquaintance what it means to say "The 1-day confidence is VaR of my portfolio with 0.99 dollars