Rao Chalasani of Livingston, New Jersey, has served in numerous technology leadership positions, including that of chief technology officer of Bank of America Merrill Lynch in New York, NY. Outside of work, Rao Chalasani contributes to several charitable organizations, including Doctors Without Borders.
Doctors Without Borders is working to ensure that the people of Haiti have access to medical care following the devastation caused by Hurricane Matthew, which resulted in the displacement of an estimated 175,000 people. In addition to ensuring continued operation of its four facilities in Port-au-Prince, Doctors Without Borders is reaching out to those in remote villages to control the spread of diseases such as cholera, dengue, malaria, and pneumonia.
With Hurricane Matthew cutting off access to villages in Grande Anse and Sud, Doctors Without Borders personnel have had to reach some villages by helicopter. The most urgent needs in these areas are food, water, and shelter.
The most common ailments resulting from the hurricane are gastritis, infected wounds and fractures, and upper respiratory tract infections. Of particular concern are infected wounds, which can eventually lead to sepsis if not treated.
An experienced finance professional based in New Jersey, Rao Chalasani most recently served as chief technology officer and director of trading risk management for Bank of America-Merrill Lynch in New York, NY. At Bank of America (BofA), Rao Chalasani developed a new risk management system that incorporated calculation of value-at-risk.
By definition, value-at-risk, or VaR, calculates the maximum loss under a determined probability in a specified time frame. The calculation of VaR requires the pre-selection of a probability percentage, a specified period of time, and a currency. Together, these three elements make up the value-at-risk metric.
As an example, an investment firm calculates the VaR on an asset at $100 million with a one-week, 95 percent confidence level. Under this metric, the investment firm may determine that an asset’s value is only 5 percent likely to drop more than $100 million over the course of one week. This determination can help an investor or manager compare the potential impact of an asset on a trading portfolio.
An analysis of available reserves and capital can determine the effect of the potential loss and help an institution determine whether an event would have a severe impact on capital. The technique can also be helpful in determining the risk to a complete portfolio or a firm as a whole.