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Highland Co. expects to receive 5 million euros tomorrow as a result of selling goods to the Netherlands. Highland estimates the standard deviation of daily
Highland Co. expects to receive 5 million euros tomorrow as a result of selling goods to the Netherlands. Highland estimates the standard deviation of daily percentage changes of the euro to be 1 over the last 100 days. Assume that these percentage changes are normally distributed. Using the value-at-risk (VAR) method based on a 95% confidence level, what is the maximum one-day loss if the expected percentage change of the euro tomorrow is 0.005? Include the negative sign.
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