The Following Table Is Presented in Item 7A of Microsoft $\quad$

The following table is presented in Item 7A of Microsoft Corporation's fiscal 2017 Form 10-K.
$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\text { Year ended June 30, } 2017$
$\begin{array}{lcccc}\text { Risk Categories (in millions) }&\text {June 30,2017}&\text { June 30, 2016}& \text { Average}&\text { High}&\text { Low }\\\hline \text { Foreign currency } & \$ 114 & \$ 92 & \$ 169 & \$ 303&\$88 \\ \text { Interest rate} & 152 & 58 & 113 & 155&57 \\ \text { Equity } & 54 & 157 & 121 & 165&54 \\\text { Commodity } & 0 & 12 & 8 & 12&0 \\\end{array}$ Microsoft uses a value-at-risk (VaR) model to communicate information about its market risks.
Required
a. Explain the market risk inherent in each of Microsoft's four risk categories.
b. Microsoft sets its one-day VaR confidence level at 97.5%. It reports a VaR statistic of $114 million as of June 30, 2017 for its foreign currency risk category. Explain what this means. Can we conclude that Microsoft incurred a loss of $114 million due to exposure to foreign currency risk during 2017? Why or why not?
c. Microsoft reports a total one-day VAR of $207 million at June 30, 2017. However, the total VaR for the four risk categories is $320 million. What causes the discrepancy between these two numbers?