Simulation problem....hard problem for me. help please.

mardi 7 octobre 2014

The Size of a Loss is either 10, 25, 40, or 80



CDF is given by:



10-----F(10) = .1

25----------= .4

40 ----------- =.6

80------------ = 1.0



Loss loss amounts are independent



you use inversion method of simulation to simulate loss amounts



How many rounds of simulation are needed in order to have a 95% chance for the est of F(50) to have an error of less than 0.01?





Help please., thiis absolute error...... cant figure it out.





Simulation problem....hard problem for me. help please.

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