remember that present value thing
you are missing a delta somewhere i.e e^[d*(t+u+1)] = v^(t+U+1). this factor is discounting to get present value. since life has been continuously sick for u+1, and before that, it took t time going from H to H.
the whole thing is summing all the payoffs of v^(t+u+1)*dt each with probability yadi yadi yada
i must admit i forgot about the whole discounting thing as well even though every question drums this into you!
Last edited by a moderator: Mar 12, 2006
