Actuarial Outpost ASM (16th) Exercise 11.3
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#1
06-19-2018, 06:16 PM
 Actua... CAS SOA Join Date: Jun 2018 Posts: 3
ASM (16th) Exercise 11.3

Is the solution to ASM (16th edition) Exercise 11.3 correct? I've been looking for the corrections/errata but can't find it.

Question:

For a distribution from (a,b,0) class, you are given that p2/p1 = 0.25 and p4/p3 = 0.225. Determine p2.

b = 0.1

a = 0.2

Therefore distribution is Neg Bi

r = 1.5

p2 = 0.05367

I am not getting this answer. Can someone confirm if this is right?

b = 0.1

a = 0.2

Therefore distribution is Neg Bi

a = B / (1+B)

B = 0.2

b = (r-1)B / (1+B)

r = 1.6

p2 = 0.04316
#2
06-19-2018, 11:44 PM
 Jim Daniel Member SOA Join Date: Jan 2002 Location: Davis, CA College: Wabash College B.A. 1962, Stanford Ph.D. 1965 Posts: 2,702

Quote:
 Originally Posted by Actua... Is the solution to ASM (16th edition) Exercise 11.3 correct? I've been looking for the corrections/errata but can't find it. Question: For a distribution from (a,b,0) class, you are given that p2/p1 = 0.25 and p4/p3 = 0.225. Determine p2. Book Answer: b = 0.1 a = 0.2 Therefore distribution is Neg Bi r = 1.5 p2 = 0.05367 I am not getting this answer. Can someone confirm if this is right? My answer: b = 0.1 a = 0.2 Therefore distribution is Neg Bi a = B / (1+B) B = 0.2 b = (r-1)B / (1+B) r = 1.6 p2 = 0.04316
Your computation of B from 0.2 = a = B / (1 + B) is wrong. CHECK YOUR ANSWER! You claim B = 0.2, but 0.2 / (1 + 0.2) isn't a = 0.2.
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#3
06-20-2018, 12:38 AM
 Actua... CAS SOA Join Date: Jun 2018 Posts: 3

Dang.

Thanks for figuring this out.

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