A2 shares have a monthly average return of 5% and a monthly return standard deviation of 6%. Returns are assumed to be normally distributed. Provide the following risk measures and show your working.

1. Calculate the stocks Value-at-Risk (VaR) at the 99% level over the 1month horizon. Interpret this result.
2. Recalculate and interpret a portfolio Value-at-Risk (VaR) at the 99% level over the 1month horizon if it were combined with AGL stocks (50% weighting in each stock) where AGL has a monthly return of 1% and an annual standard deviation of 3% and the two stocks have a correlation of 0.2.