Suppose we define $X^+, X^-$ as $\max(X, 0)$ and $\max(-X, 0)$ respectively. Then, given $Z = X + Y$, I've been trying to figure out how to express $Z^+$ and $Z^-$ in terms of $X^\pm$ and $Y^\pm$, which is supposedly possible.
I know that $\max(x, y) = \frac{x+y+|x-y|}2$, and so $Z^+ = X^+ + Y^+ + \frac{|X+Y|-|X|-|Y|}{2}$, but I'm unsure what to do with this remaining term, I can't seem to figure out how to express it in terms of the other quantities. I have considered breaking he domain $X, Y$ up into regions where $X+Y\ge 0$, $X\ge 0$ and $Y\ge 0$ and flip-flopping the signs, but this seemed like too many cases to be the true solution.
How exactly do you do this? I can't seem to see it.
Answer
You cannot express $(X+Y)^+$ alone in terms of $X^\pm$ and $Y^\pm$, and likewise $(X+Y)^-$, but you can express the two of them together:
$$
(X+Y)^+ - (X+Y)^- = X + Y = (X^+ - X^-) + (Y^+ - Y^-).
$$
(Part (b) of that exercise in Rosenthal's book kind of gives it away.)
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