Hello, I am struggling to work out the rationale behind the capital formula in the question in part (ii) More specifically, I can't work out where the 2.807 number comes from. Any help would be greatly appreciated.
Don't worry Harry many candidates at the time struggled to work out where that number came from. It is the 99.5th percentile of a t distribution with 23 degrees of freedom. Hence the examiners were expecting you to point out that 9 degrees of freedom would be more appropriate than 23, for example.
