
#1




Can Do Mining  Task 2
Since there is a new FA, I thought I will start the threads for others to comment.
Last edited by actuary0123; 12172010 at 03:25 AM.. 
#2




Hi guys, I'm getting stuck on Tasks 2 and 3. I think these questions are ok to ask. Any help would be greatly appreciated!!
1) On Task 2, when it asks for the "decisionmaking process", is it really asking for the criteria for determining what it optimal from the client perspective? The steps I'll take to find that optimal # of assays/minimum to mine is just trial and error with the macro, as far as I can tell (but I may be wrong). 2) Is Task 3 kind of similar to Task 2, only less technical/more general (more geared towards client eyes even though it's an internal memo)? I know we're recommending actual values, which we weren't in Task 2, but aside from that, we're talking about the decision making process still, arent we? Please help! 
#3




Task 2 seems more like they want you lay out the process and Task 3 is perform the process
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Only the FAC left! 
#4




I am getting counterintuitive results on Task 2. As the number of assays are increased, every one of the risk measures gets worse: mean, std deviation, VaR, CTE, % end < 0. In other words, 1 assay gives far better results than 2 assays, and so on. I am not seeing a graph where VaR or CTE measure decreases with the count of assays. Can anyone please comment on this?

#5




Do the same at a different minimum to mine value

#6




Yeah, you just have to do the minimum to mine and the number of assays together  you can't do one, then the other. If you keep the minimum to mine as 0, you'll always mine, and the number of assays you conduct is just throwing money away  the assays help you determine whether you should mine, and if your minimum to mine is 0, you're going to mine no matter what.
HOWEVER, you're answering Task 3 here. Read the assignment for Task 2 again, and don't do what it tells you to do in subsequent tasks  just do what it says to do before that. 
#7




Caveat: This is a really stupid question.
In the spreadsheet, is the "mean" the assets at the end of 20 years? If so, is it in millions? 
#8




No stupid questions  you can always blame the poor writing of the assessment!
Yes, the mean is the ending cash value at the end of 20 years  that is, the average ending cash value, out of 1000 simulations run for the assumptions in that column. Yes, it's in millions. 
#9




Thank you so much Passacaglia! I do think it's ironic that we're being graded on "effective communication" given the clarity of the assignment.

#10




I hate to throw a curveball in here, but I can't figure out what kind of method we should be using to determine the number of assays to use or min. to mine.
I did notice in G12 that the formula they're using to determine the decay from assays is N(.945,.01). It says it should be N(.945, .02). Am I missing something in the reading that this is right? After running a few scenarios, the results seem a bit more intuitive using the N(.945, .02) 
Tags 
cando, final assessment, task 2 
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