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#1




Continuity Correction
Hello!
Can someone please advise me as to when we should be using continuity correction and when it's OK not to in an exam situation? Thank you!
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#2




Continuity correction is basically used any time you are approximating a discrete distribution by means of a continuous distribution.
So, for example, if the distribution of losses is Poisson(5) and you are trying to determine P(X>10) using the normal approximation, you would want to use the continuity correction when determining your zscore. Just remember that depending on what you are calculating, you will have to either subtract 0.5 or add 0.5. So, P(X>10) > P(X>10.5) while P(X<10) > P(X<9.5) When the answer choices are largely dispersed, you don't have to worry about continuity correction because it will yield approximately the same answer as not using it. 
#4




Mmmm. Interesting. I've not always used continuity correction and can often get the correct answers.
Thank you for the responses. These are helpful.
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