Futures and Options Market Term Paper Example | Topics and Well Written Essays - 2000 words

Futures and Options Market - Term Paper ExampleIn financial reporting, VAR is considered wholeness of the major three methods used and as well recommend by the FRR. The method plays a major role in ensuring they give the most presumable the institution is likely to suffer when operated under normal market movements. The rule of disclosing markets risks requires that the method must gauge the level of risk they are exposed to and ramp up sure their investors can make their judgement in regards to the same facts. In a real sense, it should be a faithful model of letting them have it away what is happening on the ground. The FRR requires the investors the make demands of hefty compensation if they learn it after the risks have taken place (JORION, 2001).By testing, its revealed that the relationship surrounded by the exist of capital and VAR are positive. The results obtained are of great facts. This is even after they have taken care of various characteristics of the firms operat ing in that market. The relationship between the cost of equity and VAR shows that, its an effective measure which can be used to determine the value investors are likely to make for be exposed to the market risks. Moreover, am looking to determine whether, VAR is also accounted for in the determination of the cost of equity. I have achieved this by involving measures of complicated elements of the banks.On the other hand, the report is more effective to Reckless bank PLC whose management are thinking of taking value-at-risk in order to boost their stakeholders value. This means they ordain be able to make their decisions on the basis of the results they have obtained from various correlation and simulation models. Then realization of the fact that stock markets are impact by the VAR reported in terms of the results reported in an economical perspective, it brings the need to look at these results more keenly and avoid the losings which are associated with it (PENZA & BANSAL, 200 1). The