VaR provides a statistically based summary of overall market risk in Macquarie. The magnitude of VaR reflects changes in positions  as well as changes in market volatility and correlations and enhancements to the model. The integrity of the VaR model is tested  regularly against daily profit and loss. The VaR model uses a Monte Carlo simulation to generate normally distributed price and volatility paths for approximately 2,800  benchmarks, using volatilities and correlations based on three years of historical data. Emphasis is placed on more recent market  movements to more accurately reflect current conditions. Each benchmark represents an asset at a specific maturity, for example  one year crude oil futures or spot gold. The benchmarks provide a high level of granularity in assessing risk, covering a range of  points on yield curves and forward price curves, and distinguishing between similar but distinct assets; for example crude oil as  opposed to heating oil, or gas traded in different locations. Exposures to individual equities within a national market are captured by  specific risk modelling incorporated directly into the VaR model. Macquarie’s market risk, as measured by VaR, peaked in July 2013 driven by higher benchmark volatilities (reflecting general  market volatility in June) and larger commodity exposures. VaR subsequently reduced to levels in line with previous years. VaR  remains modest in comparison to capital and earnings and continues to represent less than 0.2 per cent of total equity. The graph  below shows the daily VaR and the six month average VaR as a percentage of total equity.  30  Risk Management Report  continued  Value-at-Risk macquarie.com.au  Macquarie Group Limited and its subsidiaries  2014 Annual Financial Report  2014  Average  $Am  2014  Maximum  $Am  2014  Minimum  $Am  2013  Average  $Am  2013  Maximum  $Am  2013  Minimum  $Am  Equities  5.55 8.21 2.98 4.26 6.64 2.78 Interest rates  10.37 15.56 6.17 10.45 14.19 8.19 Foreign exchange and bullion  3.97 8.05 1.05 2.58 7.00 0.42 Commodities and energy  13.08 20.89 7.36 10.02 16.95 6.35 Aggregate  18.09 28.23 9.38 14.95 20.44 10.94 VaR figures for year ended 31 March 2014 (1-day, 99% confidence level)  Aggregate VaR  VaR (1-day 99% confidence level)  – Average VaR to total equity  –  $A million  % 