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.
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. Try any of our Foolish newsletter services free for 30 days. 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.
More from The Motley Fool
Bank of America (BAC) Q4 2017 Earnings Conference Call Transcript
BAC earnings call for the period ending December 31, 2017.
Is Bank of America's CEO a Two-Faced Bitcoin Critic?
The megabank's top executive is telling customers that they can't buy bitcoin from his company, but his staff is doing a lot of patented research in this field. So what's up?
8 Key Takeaways From Bank of America's Earnings Report
Bank of America beat fourth-quarter earnings estimates, but there's a lot more you need to know.