SOA practice problems, Question 44
You are given:
(i) Losses follow an exponential distribution with mean (Theta.)
(ii) A random sample of 20 losses is distributed as follows:
Loss Range Frequency
[0, 1000] 7
(1000, 2000] 6
(2000, (Infinity) 7
Calculate the maximum likelihood estimate of (Theta.)
When I work this out, I get Theta = 1000ln(20/33). Looking at the solutions for the SOA this is the same answer, however, I evaluate this at 500. This is not listed as the correct answer and is way outside the range of possible answers. Have I missed the mark here?
