In the video below, Motley Fool financial analyst David Hanson takes a look at one number that stood out to him during the recent banking stress tests. He discusses the Value at Risk number, or VaR, and how to understand how much market and trading risk exposure this number shows a bank has. He also tells investors how the VaR can be misinterpreted, and why it can lead you to think that a bank has more or less market risk exposure than it actually does.
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How Risky Are These Wall Street Banks?
NYSE: BAC
Bank of America

Can we rely on this one number to know how risky a bank investment is?
David Hanson owns shares of Goldman Sachs. The Motley Fool recommends Goldman Sachs. The Motley Fool owns shares of Bank of America, Citigroup, and JPMorgan Chase. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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