(a) A company operates two subsidiaries, one in Western Australia and one in Queensland. The 10-day absolute 99% VaR in Queensland is estimated at $100,000 and the 10-day absolute 99% VaR in WA is estimated at $150,000. Explain how, even if these estimates are correct, the combined entity could have a 10-day absolute 99% VaR of less than $100,000.

(b) Suppose that a loss distribution has the property that the absolute 95% VaR is $30,000 and the expected shortfall at the 95% level is $50,000. Find a distribution with this property that has the highest possible value of expected shortfall at the 99% level and determine how high this could be.

please tell me some ideas about the calculations~~~