Re: Beyond Don's charts?

From Stanford Wong's BJ21

Posted by Don Schlesinger on 30 Sep 1997, at 12:41 p.m., in response to Beyond Don's charts?, posted by truefive on 30 Sep 1997, at 9:20 a.m.

"expectation per round = .2069
std per round = 26.89

"Could someone, using this example, please teach us to figure out bankroll requirements for particular risks of ruin and vice versa."

The formulas for both are at the bottom of page 140 (albeit with the typo of the "B" missing from the second formula). John Auston has created a spectacular piece of software that allows the exact kind of input you require. You can play with all the parameters, figure short-term trip ruin, longer-term ruin, bankroll requirements, everything! It's really great. I think it will be called " BJ Risk Manager," and will be marketed by Snyder (RGE) for $29.95.

Let's try to find the bankroll for, say, 10% ROR.

B = [-(s.d.)^2 x ln r]/2ev
= (-723 x -2.3)/2 x .2069
= 4,019 units.

Let's do a risk calculation with a different b.r., say, 3,000 units.

r = e^[(-2ev x B)/(s.d.)^2]
= e^(-1241/723)
= e^(-1.716)
= 17.98%

Hope this helps.

Don

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