Q1) What is the Decision Variable? and Range of values?

Q2) What is the Input Variable? Distribution

Q3) What is the output random variable? How is the output variable related to the input random variable and the decision variable?

Q4) What are the metrics of interest?

B D E F $ 6,000,000 1000 $ 5,000 $ 1,500 Minimum Ratum on Bonds Maximum Retum on Bonds Cost of Borrowing 5% 8% 10% Possible amounts of Reserve Capital $4,700,000 $ 4,800,000 $ 4,900,000 $5,000,000 $5,100,000 1 Insurance Reserve Capital Problem 2 3 Total Capital 4 Expected Number of Claims 5 Mean Value of Claim 6 Standard Deviation of Value of Claim 7 8 Number of Claims 9 Mean Value of Sum of Claims 10 Standard Deviation of Sum of Claims 11 Sum of Claims 12 13 Reserve Capital 14 Value of Claims Covered from Reserve Capital 15 Amount to Borrow 16 Cost of Borrowing 17 18 19 20 21 22 23 24 25 Capital invested in Bonds Random Ratum on Bonds Total Return from Investment Cash Loft 26 27 28 29 30 31 32 33 34 35 38 37 38 39 40 41 Values + Ready El 1