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\line{\it ``Many a nickle makes a muckle''\hfil}

According to the {\sl Toronto Star\/} of Nov.\ 29, 1983, the Vancouver
Stock Exchange index, after 22~months of operation, fell short by
574.081 points from the 1098.892 it should have indicated, until
consultants corrected the effects of cumulative errors in computation.


``The problem \dots was that the index representing all 1500 stocks in
the exchange is calculated to four decimal places but only printed to three.
Instead of rounding off the last digit, the index department at the
exchange has been truncating it---lopping it off and forgetting it.
Because there are often as many as 3000 index changes a day \dots
the result was a loss of an index point a~day, or 20~points a~month
\dots A~year after the index began, it was sitting at 725 and it should
have been a 960.''

It was hard to roughly confirm the numbers above. On the average, a~truncation
from four to three decimal places loses $0.45\times 10↑{-3}$. To lose
a~point a~day at this rate requires about two thousand index changes.
Each error was insignifican, but the cumulative effect of a~million
of them was catastrophic.




\bigskip
\line{\copyright 1985 Robert W. Floyd; 
First draft (not published) November 15, 1985\hfil}
%revised: Date; subsequently revised.\hfill}

\bye