Assume that the economy can experience four possible states: high growth, normal growth, recession, or depression. For each of those states, you expect the following stock market returns for the coming year:

1. State of the Economy	Probability	Return
   High Growth	0.2	35%
   Normal Growth	0.6	15%
   Recession	0.15	-10%
   Depression	0.05	-15%

In dollar terms, what is the value at risk (over a one-year horizon at a 5 percent probability) associated with a $1,000 investment?

The value at risk: $