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I've got a question regarding Stones Capacity paper.
On page 342, right below the equation "Exposure Ratio = 1000%", Stone says
that "...it follows that the maximum acceptable Exposure Ratio is .03 or
3%..." As if it were obvious. I don't think it's obvious and I'd like to
know where the 3% came from.
I THINK it's a part 2 question, using the normal approximation, solving
for sigma.
P(x>X) = 0.01
P((x-u)/s > ....
Which gets me NEAR the 3% Stone claims.
It's probably not important, but I'd like to know. Stones paper seems so
full of bad calcs and even some questionable theory that I'm not at all
comfortable with my approach to finding the source of the 3%.
Help?
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I've got a question regarding Stones =Capacity paper.
On page 342, right below the =equation "Exposure Ratio =3D 1000%", Stone says that ="...it follows that the maximum acceptable Exposure Ratio is .03 =or 3%..." As if it were obvious. I don't think it's =obvious and I'd like to know where the 3% came from.
I THINK it's a part 2 question, =using the normal approximation, solving
for sigma.
P(x>X) =3D 0.01
P((x-u)/s > ....
Which gets me NEAR the 3% Stone =claims.
It's probably not important, but =I'd like to know. Stones paper seems so
full of bad calcs and even some =questionable theory that I'm not at all
comfortable with my approach to =finding the source of the 3%.
Help?
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