estimating value at risk yazoo inc is a u s firm that has substantial international 1555487

Estimating Value at Risk Yazoo, Inc., is a U.S. firm that has substantial international business in Japan and has cash inflows in Japanese yen. The spot rate of the yen today is $.01. The yen exchange rate was $.008 three months ago, $.0085 two months ago, and $.009 1 month ago. Yazoo uses today’s spot rate of the yen as its forecast of the spot rate in 1 month. However, it wants to determine the maximum expected percentage decline in the value of the Japanese yen in 1 month based on the value-at-risk (VaR) method and a 95 percent probability. Use the exchange rate information provided to derive the maximum expected decline in the yen over the next month.