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  #1  
Old 09-17-2003, 01:59 PM
bigeasy bigeasy is offline
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Default help with this formula

can someone show me how to solve this.
Bankroll = [-sigma^2/(2*EV)]*
my sigma is 12
my ev is 1
this is from brucez and i seem to get a negative number.
thanks b
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Old 09-17-2003, 02:35 PM
BruceZ BruceZ is offline
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Default Re: help with this formula

can someone show me how to solve this.
Bankroll = [-sigma^2/(2*EV)]*
my sigma is 12
my ev is 1


It's bankroll = [ -sigma^2/(2*EV) ]*ln(r)

It looks like you left out ln(r)? r the risk of going broke that you want. ln(r) is the natural logarithm from your calculator or Excel. If you don't have ln but you have log base 10, you can do log(r)/log(2.718) instead. So if you want a 1% risk of ruin, then

bankroll = [ -12^2/(2*1) ]*ln(.01) = (-144/2)*ln(.01) = -72*(-4.605) = 332 units.

Maybe you squared -12 instead of taking -(12^2)?
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  #3  
Old 09-17-2003, 03:04 PM
bigeasy bigeasy is offline
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Default Re: thank you i see what i did ---nt.

ty
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  #4  
Old 09-17-2003, 03:49 PM
thylacine thylacine is offline
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Default Re: help with this formula

ln(r)<0 when r<1
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