Why Is VaR an Important Tool in Measuring Risk? What

question 5

Essay

Why is VaR an important tool in measuring risk? What are some of its shortcomings? Ask the class to explain the rationale for a company to rely heavily on VaR in the absence of other measurement tools.

---

Definitions:

Ventilator-Associated Pneumonia

A type of lung infection that occurs in people who are on mechanical ventilation breathing machines in hospitals.

Chlorhexidine

An antiseptic used to clean the skin or mouth, preventing infections.

Chest Tube

A medical device inserted through the chest wall to remove air, fluid, or pus from the pleural space, helping the lungs to expand properly.

Water-Seal Chamber

A component of a chest tube drainage system that prevents air from re-entering the patient’s pleural space and allows trapped air and fluid to escape from the chest.