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-   -   SOA Practice Exam #305 (Kaplan-Meier) (http://www.actuarialoutpost.com/actuarial_discussion_forum/showthread.php?t=332763)

thirteenthgrave 06-06-2018 11:24 AM

SOA Practice Exam #305 (Kaplan-Meier)
 
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Hello All, how am I supposed to interpret the numbers on the claim count table?

From the answer key, it seems like you are supposed to take each loss as it is, ignoring whatever the question said about the policy limits:

92/112 + 65/92 + 32/59 where 32 = 14 + 18 and 59 = 92 - 27 - 6

If that is the case, why did it insert 6 losses at $1500? Indeed, I right-censored 14 + 10 + 6 = 30 losses from the $500-deductible group. Thus, I had:

92/112 + 65/92 + 17/35 where 17 = losses in the $750-group and 35 = 92 - 27 - 30

The wording is not clear, if not outright misleading.

Master_of_my_domain 06-06-2018 12:22 PM

Quote:

Originally Posted by thirteenthgrave (Post 9341339)
From the answer key, it seems like you are supposed to take each loss as it is, ignoring whatever the question said about the policy limits

The problem states that the claim count distribution is independent of any deductible or policy limits. So, I think they state the assumption you are talking about.

Actua... 06-11-2018 03:02 PM

Quote:

Originally Posted by thirteenthgrave (Post 9341339)
Hello All, how am I supposed to interpret the numbers on the claim count table?

From the answer key, it seems like you are supposed to take each loss as it is, ignoring whatever the question said about the policy limits:

92/112 + 65/92 + 32/59 where 32 = 14 + 18 and 59 = 92 - 27 - 6

If that is the case, why did it insert 6 losses at $1500? Indeed, I right-censored 14 + 10 + 6 = 30 losses from the $500-deductible group. Thus, I had:

92/112 + 65/92 + 17/35 where 17 = losses in the $750-group and 35 = 92 - 27 - 30

The wording is not clear, if not outright misleading.

You are interpreting the question as if it says:
" ...and policy limits of 1,500 and 20,000, respectively."

But it doesn't say respectively. So either limit can be applied to either of the policies, regardless of the deductible.

So the 14 + 10 that you are including from the $500 deductible group are actually $500 deductible with $20,000 limits; not $500 deductible policies with $1,500 limits.

That's why the Question has specific categories for Above $1,500 and Above $20,000 in each group.


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