Error in Stone Question

madisoninc@mindspring.com
Mon, 12 Apr 1999 11:10:16 -0400

I discovered a horrible error in my sample study question on the Stone
Reading. This is in regards to "d", the capacity differential.

I originally said that "d" was positive for risks that add capacity. This
is horribly wrong.

To clarify, "d" is NEGATIVE for risks that add capacity (resulting in a
lower premium since "d" is subtracted in the denominator) , while "d" is
POSITIVE for so called "capacity" risks, or risks that consume capacity.
This issue is somewhat confusing and I apologize for any problems this caused.

John Gleba
madisoninc@mindspring.com
706-342-7750