Ruin Theory CMP Page 50

Discussion in 'CM2' started by Jia Syuen, Jun 24, 2021.

  1. Jia Syuen

    Jia Syuen Very Active Member

    It says that we can find the Beta=0.9167 if we equal to the value of R at 1 from the Eqn (5.5). But I'm not sure how. The equation 5.5 is R=(2*alpha-1)/(10(12*alpha^2-alpha)), if we set R=1, we would get complex solutions for alpha.

    Can anyone help me out here? Thank you.
     
  2. Steve Hales

    Steve Hales ActEd Tutor Staff Member

    Hi
    When it says "equal to the value of R at 1" it doesn't mean set R=1. It means "equal to the value of R when alpha is set to 1", ie R = 0.00909. This then matches with the construction of Figure 13, and leads to some real roots for equation 5.5.
    Hope that helps.
     
    Jia Syuen likes this.

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