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Small perturbations with large effects on value-at-risk

Manuel L. EsquívelLuís DimasJoão Tiago MexiaPhilippe Didier — 2013

Discussiones Mathematicae Probability and Statistics

We show that in the delta-normal model there exist perturbations of the Gaussian multivariate distribution of the returns of a portfolio such that the initial marginal distributions of the returns are statistically undistinguishable from the perturbed ones and such that the perturbed V@R is close to the worst possible V@R which, under some reasonable assumptions, is the sum of the V@Rs of each of the portfolio assets.

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