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      Chapter

      Developing a Model
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      Chapter

      Developing a Model

      DOI link for Developing a Model

      Developing a Model book

      Developing a Model

      DOI link for Developing a Model

      Developing a Model book

      ByArne Sandström
      BookHandbook of Solvency for Actuaries and Risk Managers

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      Edition 1st Edition
      First Published 2010
      Imprint Chapman and Hall/CRC
      Pages 8
      eBook ISBN 9780429062704
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      ABSTRACT

      IN THIS CHAPTER, we will start with an exact relationship assuming that a variable y can beexactly determined by a function of another variable x, that is, f (x). We use the Taylor expansion, dropping some higher-order terms to get approximations. This is discussed in Section 12.1. The Taylor expansion of this function, dropping some higher-order terms, gives us either a linear approximation or a nonlinear approximation.

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