ASM 9th ed. Supplement - Supplementary Question Errors?

[Actuary-2-B]

Two possible errors I see -

#14 likelihood function should be theta^3*blah NOT theta*blah, hence the integrand for the gamma distribution should be alpha = 8 (not 6) and scale parameter 1/0.0027 so its mean is 8/0.0027

#17 the question asks to calculate the predictive mean (claims submitted by this insured in the NEXT year), but the solution states the posterior mean. Therefore, solution should be 0.123249739

[Actuary-2-B]

#19 sqrt(1.04)/2.6 = 0.39223227 NOT 0.039223

[Actuary-2-B]

#21 Calculation error = 2528.23

[badmaj5]

You can look at the 9th edition errata for the page number that there is an issue in the supplement.

[Actuary-2-B]

Thanks. I noticed that questions #14 and #17 were addressed. Same corrections as what I had.

There is still a question surrounding #21. Var(TVaR) - should (9588-9421) be squared? The manual doesn't indicate it should be squared. But the errata says it should be. http://www.aceyourexams.net/errata/ErrataC-9p.pdf --> page 9

[colby2152]

Thanks. I noticed that questions #14 and #17 were addressed. Same corrections as what I had.

There is still a question surrounding #21. Var(TVaR) - should (9588-9421) be squared? The manual doesn't indicate it should be squared. But the errata says it should be. http://www.aceyourexams.net/errata/ErrataC-9p.pdf --> page 9

There better not be a question on the variance of TVaR on this exam. Based on all of these discussions, it should either be thrown our or multiple answers should be accepted.

[gordon]

There better not be a question on the variance of TVaR on this exam. Based on all of these discussions, it should either be thrown our or multiple answers should be accepted.

Pretty sure the SOA doesn't care about errors in the study manual. The first MFE manual had an error on about every fourth question and there were no exceptions made for that.

[badmaj5]

In Loss Models, it is squared - thus it is squared. As Jim Daniel pointed out, whether right or wrong, the SOA will use the method shown in the text. However, daaaave, Prof. Weishaus, and Jim Daniel all verified that it should be squared and the old material that was on the syllabus was incorrect.

All that said, it shouldn't be an issue, just square it and you're good to go.

[colby2152]

Pretty sure the SOA doesn't care about errors in the study manual. The first MFE manual had an error on about every fourth question and there were no exceptions made for that.

In Loss Models, it is squared - thus it is squared. As Jim Daniel pointed out, whether right or wrong, the SOA will use the method shown in the text. However, daaaave, Prof. Weishaus, and Jim Daniel all verified that it should be squared and the old material that was on the syllabus was incorrect.

All that said, it shouldn't be an issue, just square it and you're good to go.

It's not just the study manual - it is the textbooks! Will the SOA rule that it should be squared or not?

[badmaj5]

It's not just the study manual - it is the textbooks! Will the SOA rule that it should be squared or not?

Huh? The textbook has it squared. What is your question?

[Actuary-2-B]

Thanks all... I don't have the new edition of the textbook, so this most helpful. Good luck on the exam!

Also, just noticed the Var(TVaR) discussion post... I should really skim thru everything before posting my questions! Thanks for the responses, nonetheless.

[colby2152]

Huh? The textbook has it squared. What is your question?

I thought people were saying in the other thread that a previous version of a textbook had it wrong?

[badmaj5]

Last time around, the risk measures section was from the textbook, it was from a different study note that was in PDF. In there, the formula was not squared, and so last time if they had asked the question (which they did not), then I believe it would have not been squared.

But as I said, none of that matters now. The textbook has it squared, squaring it is correct, and that is what you should do on the exam.