Re: Feldblum
RICHARD & YAEKO KRIVO ( (no email) )
Wed, 14 Oct 1998 18:18:06 -0400
Hi Amy, I think I have an answer for you. The second criticism refers to
the fact that a risk load is arbitrarily chosen and allocated using either
the variance or standard deviation method. The focal point being that a risk
load is arbitrarily chosen. The third criticism goes through a numerical
example which displays the marginal variance as new risks are added as
remaining constant and the marginal standard deviation approaching 0.
Philbrick counters this argument by showing that the marginal variance is a
good measure. If you are still having trouble with this, I plugged these
figures into a worksheet.
-----Original Message-----
From: Amy.Hoffman@reliancenational.com <Amy.Hoffman@reliancenational.com>
To: studygroup9@lists.casact.org <studygroup9@lists.casact.org>
Date: Tuesday, October 06, 1998 1:41 PM
Subject: Feldblum
>
>
>I have a question about Feldblum's 3 criticisms of the standard
>deviation/variance methods of determining risk loads.
>
>Criticism #2 is that they determine "only relative risk, not absolute
>risk".
>
>Criticism #3 is that "these methods determine relative standard deviation
>or relative variance, not relative risk."
>
>Don't these statements contradict each other? Am I missing something? Any
>clarification would be appreciated.
>
>Thanks.
>
>
>