1. Define Value-at-Risk (VaR).
2. Interpret monthly 1%VaR = -0.25% for the exchange rate S(AUD/USD) returns.
3. Show 1%VaR = -0.25% on a graph or chart assuming normality for returns.
4. Using the data set below, calculate 1% daily VaR of an AUD $300 million position in US dollars. For this purpose, use the parametric approach. The z-value at 1% is -2.326.

Day	AUD/USD
1	0.5324
2	0.5177
3	0.5642
4	0.5948
5	0.5521
6	0.5777
7	0.5135

5. What are the key differences between parametric VaR approach and the historical VaR approach and what are the key assumptions that underlie each approach?