Hi all. I have a question on the method used in the exam paper and question in the title. In the audit word doc, the steps used in this question is:
Min[100,100+ln(U_(i,n) )/λ_n + 〖points dropped s.d.〗_n/b]
This is done to convert the random uniform distribution numbers to exponential. What I dont understand is why we need to divide the ln figure by lambda and then add the standard deviation (in pink in the equation above). Am I missing something?
Thank you!
Min[100,100+ln(U_(i,n) )/λ_n + 〖points dropped s.d.〗_n/b]
This is done to convert the random uniform distribution numbers to exponential. What I dont understand is why we need to divide the ln figure by lambda and then add the standard deviation (in pink in the equation above). Am I missing something?
Thank you!