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Unformatted text preview: Finally, apply the Law of Unconscious Statistician to evaluate the ratio as , , ( , ) ( ) ( , )d d ( ) ( , )d d X Y X Y g s t I s t f s t s t I s t f s t s t - - - - > > = . . [Hint: Use (5.5) on page 302 to check your answer for the denominator.] Copying the solution on page 752 is not acceptable for this homework. You should know the difference between effective annual interest rate and continuously compounded interest rate (or force of interest ). If not, look up Appendix B.1 on page 875 of McDonald (2006)....
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- Spring '08