Overflow Problem On Decimal(38,14) Column With SQL2005 SP2 With Min Value Of 0.1 And Maximum Of 3.0

On table TABLENAME, I have increased the size of column C to decimal(38, 14); maximum size and an excessive amount of precision.

If I do a 

SELECT MAX(CONVERT(DECIMAL(7,2), A) / B) FROM TABLENAME

SELECT MIN(CONVERT(DECIMAL(7,2), A) / B) FROM TABLENAME

I get 3.0000000000000 for the MAX and 0.1000000000000 for the MIN value, yet if I update

UPDATE TABLENAME SET C = CONVERT(DECIMAL(7,2), A) / B WHERE B <> 0

Msg 8115, Level 16, State 8, Line 1

Arithmetic overflow error converting numeric to data type numeric.

The statement has been terminated.

Obviously I have obscured the column names and table name, but I am puzzled as to why values in the range 0.1 to 3.0 should give an overflow error.

I am using SQL2005 SP2