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#1
08-19-2006, 03:44 PM
 LTH Member Join Date: Mar 2005 Posts: 115
Mod 4 #9

Has anyone done this? Don't we need to know the valuse of S0?

Thanks.
#2
08-19-2006, 03:47 PM
 Jenka Member SOA AAA Join Date: Nov 2005 Posts: 58

It's ln(900,000)
#3
08-19-2006, 03:52 PM
 Gandalf Site Supporter Site Supporter SOA Join Date: Nov 2001 Location: Middle Earth Posts: 26,467

Based on this, S0 is 900,000. But then you do want to proceed to ln(S0).
#4
08-19-2006, 03:55 PM
 LTH Member Join Date: Mar 2005 Posts: 115

Quote:
 Originally Posted by Jenka It's ln(900,000)
This was my logic:
Pr(St/S0>1.111) -> P(St>S0 * 1.111) -> P(ln(St) > ln(S0*1.111))

now, using S0=900,000, and normalizing this probability gives option C the smallest probability, which was the right answer...

What's wrong with my idea?
#5
08-19-2006, 03:59 PM
 Jenka Member SOA AAA Join Date: Nov 2005 Posts: 58

Quote:
 Originally Posted by Gandalf Based on this, S0 is 900,000. But then you do want to proceed to ln(S0).

I stand corrected. I meant S0. Honestly.

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