Change of Symbols

[ed999]

I plan to take 4 in November without taking 3. I just noticed that the symbols used in the varioius discrete distributions changed from the course one! For example, in school, P is the probability of success and q = 1-p. But in loss models and Mahler's notes, q is success! And for negative binomial, no longer do we use p and q, but a new variable, beta, where q = 1/(1+b). Can anyone explain to me why this is the case?

Also, I am having trouble understanding the loss models stuff. Is it recommended that I read the text first, then Mahler's? Or perhaps it's juts because i haven't taken course 3.

By the way, do we really have to read all the stuff about truncation in loss models, such as truncation from below and shifting???

Thanks a lot in advance ppl!

[Macroman]

I plan to take 4 in November without taking 3. I just noticed that the symbols used in the varioius discrete distributions changed from the course one! For example, in school, P is the probability of success and q = 1-p. But in loss models and Mahler's notes, q is success! And for negative binomial, no longer do we use p and q, but a new variable, beta, where q = 1/(1+b). Can anyone explain to me why this is the case?

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I'm not sure about the negative binomial parameterization. For the binomial distribution the p and q serve the same roles mathematically (ie VAR = npq=n(p)(1-p)=n(1-q)q ). The usual roles of p and q are reversed because the primary variable of interest is time until death.

Truncation is an important issue, but the Loss Models text might not be the best approach to learning it. Any time you have to deal with a deductible, policy maximum, age limit for coverage etc that is a truncation or censoring issue.

[jerkweed]

Dude, if you are strugling with that concept, you are answering your question of which exam to write this fall. :shake:

[Pi Man]

Dude - don't be a jerkweed, he's just trying to deter.... oh wait, that's your name. never mind. Carry on!


Dudes,
in what other (legal) career can you discuss death as a success? sounds strange, dunnit?

[Cynic]

I plan to take 4 in November without taking 3. I just noticed that the symbols used in the varioius discrete distributions changed from the course one! For example, in school, P is the probability of success and q = 1-p. But in loss models and Mahler's notes, q is success! And for negative binomial, no longer do we use p and q, but a new variable, beta, where q = 1/(1+b). Can anyone explain to me why this is the case?

Also, I am having trouble understanding the loss models stuff. Is it recommended that I read the text first, then Mahler's? Or perhaps it's juts because i haven't taken course 3.

By the way, do we really have to read all the stuff about truncation in loss models, such as truncation from below and shifting???

Thanks a lot in advance ppl!

Yes, C3 & C4 use q and beta for Binomial and Negative Binomial, respectively. Not all the texts in the syllabus use the same notation, though. You should print out the Tables for C4 and follow the notation there (the first page also explain what kind of notation is adopted by the Exam Committee).

Don't read the Loss Model book. It's a waste of time. Go straight to Mahler's notes. His notes cover everything you need to know about this topic.

I think you need to know the stuff about truncation and shifting well, but not all the possible combinations, just the main ones. If I'm not mistaken, Mahler also emphasizes which ones you should focus on.

[jerkweed]

Pi Man Posted: 10 Jun 2002 12:03 Post subject:

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Dude - don't be a jerkweed, he's just trying to deter.... oh wait, that's your name. never mind. Carry on!



Dude - Don't be a pee pee, Given that KPW introduces different probability nomenclature and concepts used in C3 which are a prerequisite for C4, I just thought it may answer his quest......... oh wait, that's your name. Never mind. Carry on.