Transaction exposure based on value at risk

is primarily concerned about its exposure in euros, as it has determined that the remainder of its portfolio is such that the effects of currency

fluctuations typically offset.

the standard deviation of these changes is $3\mathrm{.}00\%.$ Colorado assumes that these changes are normally distributed, such that the maximum quarterly

loss lies within $1\mathrm{.}65$ standard deviations below the expected change with $95\%$ confidence.

Under this scenario, the maximum one$-$quarter loss due to transaction exposure is approximately

with $95\%$ confidence.

Now suppose that, based on updated data, the expected change in the euro is $-5\mathrm{.}00\%.$ All else remains unchanged.

Under this scenario the maximum one$-$quarter loss due to transaction exposure is approximately

with $95\%$ confidence.

Based on these results, the larger $($in magnitude$)$ the expected change in the euro, the

the maximum loss will be$.$