Capital allocation refers to the deployment of funds across various units or projects within an organization based on calculated potential returns and risks, often employing techniques like value-at-risk (VaR) and contributing to metrics such as shareholder value and Economic Value Added (EVA).
A measure of possible worst-case losses in excess of the average used in banking to calculate both capital adequacy requirements and certain performance measures, such as risk-adjusted return on capital (RAROC). It is usually based on the value-at-risk (VaR) methodology.
Cash Flow at Risk (CFaR) is a financial metric used to quantify the risk to a firm's cash flows over a specific time period under normal market conditions. It leverages the concept of Value-at-Risk (VaR) to estimate the potential deviation in cash flows, helping firms to manage liquidity risk and financial planning.
Value-at-Risk (VaR) is a statistical technique developed to measure and quantify the level of financial risk within a firm or portfolio over a specific time frame. It represents the maximum potential loss with a given confidence level.
Value-at-Risk (VaR) is a statistical technique used to measure and quantify the level of financial risk within a firm or investment portfolio over a specific time frame.
