#7a

edited September 2024 in Practice Exam 1

Hi, regarding part a, is it incorrect to apply efficiency test alone to determine the more equitable plan?

Comments

  • Great question. The question here is vague because it doesn't tell you how to demonstrate equity. However, it is worth a lot of points. Calculating the efficiency test statistic for each plan and making a recommendation would likely receive all of the points as it's a substantial amount of work and answers the question. But since you've done a lot of work to get there it wouldn't hurt to quickly comment on the manual and standard loss ratios to be sure.

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