The situation
A portfolio has one-day 99% VaR of ₹40 lakh. A day ends with a loss of ₹65 lakh.
Your task
How should the desk report the loss relative to VaR?
Reveal step-by-step solution
Set up the problem
The modeled loss quantile is ₹40 lakh at the stated horizon and confidence.
Work through the numbers
₹65 lakh exceeds the threshold by ₹25 lakh, so record one exception.
Interpret the result
Review the event and model assumptions. VaR alone does not measure average loss beyond the threshold.
What to remember
Always state horizon, confidence, P&L definition and method with the VaR number.