If Z is defined as E/(E+K), then Z/E is 1/(E+K)
and d/dE[Z/E] is equal to -1/[(E+K)^2], which is negative
JM
______________________________ Reply Separator _________________________________
Subject: Gillam/Snader
Author: "Paul Klauke/CorpCentre/GB/GRE-Group_at_GRE-GROUP KLAUKE01 - GBGRE002"
<paul_klauke@gre-group.e-mail.com> at uucp
Date: 7/24/98 12:35 PM
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Guardian Royal Exchange Services ltd
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Royal Exchange
From Paul Klauke Internal tel 723 5624
Actuary Direct tel +44 (0) 171 454 5624
on 24/07/98 17:28 Direct fax +44 (0) 171 696 5336
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In Gillam/Snyder I'm having trouble interpretting
'd/dE[Z/E} < 0' (top of page 4)
as
'As the size of risk increases, the percentage charge for any
loss of a given size decreases.' (bottom of page 3)
Any help?
Paul