Hi,

have been taking a good few practice exams and been inputting results into a spreadsheet.

then i started messing around with the figures with averages and standard deviations. then shortfall risk came to mind return mean - 2*standard deviation assuming normal distribution my worst case scenario will be 55%…must study harder.

then VAR came to mind: mean result - Z(standard deviation) = 65%

what are chances of getting 65% or less in exam? maybe you must assume a mean return of 65% on practice exams.

so say your mean result is 68% with a standard deviation of 6%. Look up z score for 0.5 [(68-65)/6] gives you .1915 and subtract from 0.5 to get 0.31. you got a 31% chance of getting less then 65% and risking failure.

so you can take your chances or keep studying to improve those odds.

just a bit of playing around this morning on a break, thought i would show that VAR has a practical use beyond finance.

let me know what u think.