pm: Another RoR question..

[pm]

Don mentions in chapter 8 that the probability of losing 1/2 your bank is the square root of your total risk.

How would you calculate the probability of losing 1/3 of your bank, or 1/4, or any other fraction, when you know your total RoR (no resizing, of course)?

[Don Schlesinger]

> Don mentions in chapter 8 that the
> probability of losing 1/2 your bank is the
> square root of your total risk.

If the fraction of the total bank to be lost is 1/n, we take the nth root of the total risk. For 1/2, we take the square root.

> How would you calculate the probability of
> losing 1/3 of your bank, or 1/4, or any
> other fraction, when you know your total RoR
> (no resizing, of course)?

Take, respectively, the cube root, fourth root, etc.

Don

[pm]