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# Suppose you’ve estimated that the fifth-percentile value at risk of a portfolio is $\230%$. Now you wish to estimate the portfolio’s first-percentile VaR (the value below which lie $1\%$ of the returns). Will the $1\%$ VaR be greater or less than $230\%$?

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1 of 2The VaR or value at risk is the measure of downside risk of a specific investment. There is usually a given probability for the worst possible risk that could be suffered, which is typically around 5%. In general as the magnitude of the return declines, so does the probability or percentile of a return. Therefore we can conclude that a 1 percentile probability will provide a smaller VaR than a 5 percentile probability.

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