Suppose that the standard deviation of daily returns for a stock in the past quarter is 1.9 percent, and that the expected daily return of the stock is 0.01 percent. Using a 99 percent confidence interval, if the daily returns are normally distributed, the lower boundary is approximately 2.576 standard deviations away from the expected outcome. Using the value-at-risk method, the maximum percentage one-day loss based on a 99 percent confidence level is:

-5.275 percent

-5.031 percent

-4.884 percent

-4.689 percent

Suppose an investor has $17 million invested in that stock. The maximum one-day loss is estimated to be:

-$705,738

-$830,280

-$871,794

-$921,611