The purpose of this article is to gain a concrete understanding of the perception of value at risk, its strengths and weaknesses, and the controversies surrounding its use in management of risk. Two articles will be used to aid in understanding VaR, “An Irreverent Guide to Value at Risk,” by Barry Schachter and “Subjective Value-at-Risk,” by Glyn Hoyt. These articles will provide us with some background information describing VaR, understanding its limitations and its developing role in risk management. Article 1 “An Irreverent Guide to Value at Risk” Value at risk has been called the “new science of risk management.” Around the world, organizations are rushing to implement new technology. Due to its technical nature, I would like to first give you 3 equal definitions of VaR provided by the author.1. A forecast of a given percentile, usually in the lower tail of the distribution of a portfolio's returns over a certain period; similar in principle to an estimate of the expected return of a portfolio, which is a 50th percentile estimate.2. An estimate of the level of loss on a portfolio that is expected to be matched or exceeded with a given, small probability.3. A number invented by purveyors of monetary risk panaceas intended to mislead senior management and regulators into false confidence that market risk is adequately understood and controlled. It is a statistical method used to calculate and specify the level of financial risk within a company or portfolio investment over a limited time frame. The risk manager's job is to ensure that risks are not taken beyond the level at which the firm can absorb the losses of a likely worse outcome. VaR is just a number created to provide false certainty to senior management… middle of the paper… the results can provide additional information about expected losses over a given period of time. The stress test is used as a supplement to the VaR analysis. “Because VaR does not capture all relevant information about market risk, its best use is as a tool in the hands of a good risk manager.” There is reason to be skeptical about both its quality as a risk management tool and its use in decision-making. Article 2 “Subjective Value at Risk” Value at risk is becoming extremely popular and is leading experts to measure other risks such as credit risk and operational risk, and many believe that all of a company's risks should be calculated with a single risk measure. The author believes that if this were the case there would be a lot of negative reactions due to the fact that VaR is controversial and that it might still be ineffective for analyzing these other risks in addition to market risk.