Chapter 25: Reinsurance (2) - Stochastic simulation - reinsurance with fluctuations reserve

I was going through the worked example on modelling reinsurance with fluctuations reserves as given on pages 14-15 of Chapter 25: Reinsurance (2).

Point #8 mentions that \(X\) is now calculated as:
\[
X = [C(g) - C'(r)] - [P(g) - P(r)] - M]
\]

However, in the preceding point #7, it says:

Hence, shouldn't we have \(0.4P(r)\) in the equation for \(X\) above instead of \(P(r)\). That is to say, the expression should be:
\[
X = [C(g) - C'(r)] - [P(g) - 0.4P(r)] - M]
\]

Is there anything that I am missing out here?

 

This is exactly what I was looking for.

Thanks!