Term Risks Math

Corresponding to my "Dollar Cost Averaging Risk" article, in a 2014 Society of Actuaries publication.  Please download the spreadsheet.

Background

There are two spreadsheets (Theoretical, and Simulations).

Per paper, enter 3 assumptions in green, on the 2nd row of Theoretical spreadhseet.

The red data on the left is the traditional declining-balance method.

The blue data on the left is the proposed incremental-time method.

The two yellow left-side risk (from the fixed σ approach), on both the Theoretical, and Simulations tabs, all agree.

The right-side of both spreadsheets shows the mathematics of the varying σ approach.