Climate Resilience and Benefit–Cost Analysis: A Handbook for Airports (2019) / Chapter Skim
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Pages 79-82
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From page 79... ...
79 Chapter 2 provided an initial discussion of Monte Carlo simulation techniques and associated VaR analysis. Where appropriate, much of that material is repeated here, along with more detailed discussion, to ensure that a complete description of the techniques is accessible in one place.
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From page 80... ...
80 Climate Resilience and Benefit–Cost Analysis: A Handbook for Airports to cost $Y per day if the temperature exceeds 110°F. With the extension, flights can operate normally without any service disruptions.
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From page 81... ...
Monte Carlo Simulation and Value-at-Risk Analysis 81 A sample VaR for the portfolio of a large financial institution might show that it has a 1% chance of losing $100 million or more in a day given its portfolio and the historic price movements in the underlying individual stocks and bonds. In conventional usage, one would say that the company's 1% VaR is $100 million.
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From page 82... ...
82 Climate Resilience and Benefit–Cost Analysis: A Handbook for Airports delays. So it is important to recognize that the 10% chance of damages includes many different potential outcomes; it does not refer to an annual probability of occurrence, but rather the overall likelihood (over the entire analysis period)
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