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Sparky5
10-25-2005, 12:32 PM
What are the general keywords when we are talking about conditional or unconditional?

Example:
Payments
Total losses
Claims
Deductible

PrEx3 #3 says: Calculate the varance of claim sizes after the deductible. I interpret that as conditional because you cant pay the deductible unless the claim is above the deductible, which means it will not be reported unless it is above the deductible. Therefore I used conditional and got it wrong.

Jim Daniel
10-26-2005, 09:14 AM
There are two different payment variables. Y^L is the amount paid per loss, and so would equal 0 for a loss below the deductible. Y^P is the amount paid per positive payment, and so is only observed for losses greater than the deductible; that is, Y^P = X - d | X > d .

Jim Daniel

Sparky5
10-26-2005, 10:28 AM
Yeah, thanks for the review, I have a good conceptual grasp of the things you have mentioned. It's not so much the concept that gives me problems, it's the wording of the problems, and knowing which conept to match with the words the exams use.

funk1
10-26-2005, 11:28 AM
Yeah, thanks for the review, I have a good conceptual grasp of the things you have mentioned. It's not so much the concept that gives me problems, it's the wording of the problems, and knowing which conept to match with the words the exams use.

Exxxxxactly. How many times have you read a problem like this, think you have no clue what they want you to do/use, and then read the solution and think, "oh yeah, i'm an idiot."