Actuarial Outpost Question-TIA A.2 #17
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#1
05-23-2012, 05:47 PM
 BAIINinja Member Join Date: Nov 2008 Location: East Coast College: Veteran: Airborne Infantry Favorite beer: Sam Adams Boston Lager Posts: 806
Question-TIA A.2 #17

Hello, I know there is a video, but I am stuck at work and my computer can not handle the video. Losses can be 100, 200, or 300 with probs .2, .2, .6

Deductible = 150, Y is the claim payment per payment find Var (Y).

I have gotten the to the point where I know there are only a chance of 2 different payments, 50 at 25% and 150 at 75%. This would make it Binomial.

Lets have p = .25 and q= .75

The pdf solutions have (150-50)^2*p*q ..... I do not understand why it is (150-50)^2

Any light shed on this would be awsome.
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#2
05-23-2012, 05:47 PM
 Actuarialsuck Member Join Date: Sep 2007 Posts: 5,328

Quote:
 Originally Posted by BAIINinja Hello, I know there is a video, but I am stuck at work and my computer can not handle the video. Losses can be 100, 200, or 300 with probs .2, .2, .6 Deductible = 150, Y is the claim payment per payment find Var (Y). I have gotten the to the point where I know there are only a chance of 2 different payments, 50 at 25% and 150 at 75%. This would make it Binomial. Lets have p = .25 and q= .75 The pdf solutions have (150-50)^2*p*q ..... I do not understand why it is (150-50)^2 Any light shed on this would be awsome.
Bernouilli shortcut
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Quote:
 Originally Posted by Buru Buru i'm not. i do not troll.
#3
05-23-2012, 05:57 PM
 BAIINinja Member Join Date: Nov 2008 Location: East Coast College: Veteran: Airborne Infantry Favorite beer: Sam Adams Boston Lager Posts: 806

Ok, I will put that to memory, Thank you.
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P FM MLC MFE C IA FA APC
#4
05-23-2012, 06:15 PM
 icon41gimp Member Join Date: May 2011 Posts: 421

You'll use it often enough that it will become 2nd nature.
#5
05-23-2012, 06:20 PM
 Colonel Smoothie Member CAS Join Date: Sep 2010 Studying for CAS 5 College: Jamba Juice University Favorite beer: AO Amber Ale Posts: 9,546

2nd nature just like when Ralph Macchio was waxing that car.
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Recommended Readings for the EL Actuary || Études in R || Open Database
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Last Revised: 15.03.2013

Quote:
#6
05-23-2012, 09:09 PM
 BAIINinja Member Join Date: Nov 2008 Location: East Coast College: Veteran: Airborne Infantry Favorite beer: Sam Adams Boston Lager Posts: 806

....any analogy with Ralph Macchio is awesome
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P FM MLC MFE C IA FA APC
#7
05-23-2012, 09:30 PM
 truonda Member SOA Join Date: Apr 2012 Studying for MLC College: Waterloo Alumni Posts: 186

Nice to see you here too BAII! Definitely a shortcut worth etching to the back of your mind.
#8
05-23-2012, 09:34 PM
 Colonel Smoothie Member CAS Join Date: Sep 2010 Studying for CAS 5 College: Jamba Juice University Favorite beer: AO Amber Ale Posts: 9,546

Quote:
 Originally Posted by truonda Nice to see you here too BAII! Definitely a shortcut worth etching to the back of your mind.
You might not want to use a BAII on this test, BAII.
__________________
Recommended Readings for the EL Actuary || Études in R || Open Database
Version 0.1
Last Revised: 15.03.2013

Quote:

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