Page 11 of Brosius, I'm looking at the linear approximation formula and the 1.2.3 listed for Hugh White's questions. If Cov(X,Y) < Var(X), isn't L(x) still bigger than E[Y]? How is this a decrease in the reserve? Isn't this true for all conditions?
Like, let's say x = 5 and E(X) = 4, then under all conditions E[YX] = (something bigger than 0 ) + E[Y]
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Last edited by AbedNadir; 12112019 at 10:36 AM..
