Table M and Insurance Charges (Easy)

stratthixxstratthixx
in Fisher.AggExcess

Can you explain in detail using an example, how to obtain the bounds? I cannot get any of these correct and have no idea why. I have the same dF(y) but never arrive at the same answers.

Comments

  • stratthixxstratthixx
    image.png

    Using this as an example,

    For A = 99,

    image.png

    = 0.065 which is wrong... Can you explain where I went wrong?

  • adminadmin

    Hi,

    Good question, you've nearly got the right answer but it didn't help that we had a small coding error too.

    For a distribution A ~ Uniform [a,b], the distribution Y = A/E has a uniform distribution on [2a/(a+b), 2b/(a+b)] so your upper bound should be 2*136/(136+27) = 1.6687. Once you fix that you should get the correct answer of 0.07705.

    See if you can come up with the nice formula for the general case (and hopefully implement it better than we did first go!)

  • stratthixxstratthixx

    Thanks!

  • kmo484kmo484

    I assume the answer is yes, but I'm just curious if the small coding error mention above was fixed? I'm also getting these all wrong so I just wanted to confirm before I spent too much time (or more than I already have) trying to figure things out...

  • adminadmin

    Yes, the small coding error was fixed in 2021.

    Try drawing the Lee diagram, carefully label all points, and find the equation of the line. Let us know if you're still having difficulties.

  • kmo484kmo484

    Apparently I just needed to step away for a day and try again. I'm getting it now. Thanks for confirming!

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