

FlashChat  Actuarial Discussion  Preliminary Exams  CAS/SOA Exams  Cyberchat  Around the World  Suggestions 
ShortTerm Actuarial Math Old Exam C Forum 

Thread Tools  Search this Thread  Display Modes 
#248




Hi guys,
Really hoping someone can clear this up for me. When we are working with Bayesian credibility and the continuous prior, how do we know the limit of the likelihood? For example, The size of claims for each insured follows a single parameter Pareto distribution with parameters aplha=2 and theta. The prior density of theta is the improper prior 1/theta where theta > 0. For a randomly selected insured, you observe 1 claim of size 200. Determine the expected size of the next claim for this insured. In this example, my study manual says that theta is less than or equal to 200 otherwise the likelihood of a claim of 200 is zero. How do I know that? How will I be able to determine that on the test? Please help. I have been trying to figure it out but can't seem to get it. Thanks! 
#249




Quote:

#250




It's a single parameter Pareto which has a range of Theta > infinity. This is different from the Pareto distribution we normally use and it's on the exam C tables.
__________________
Meepo is love, Meepo is life. 
Thread Tools  Search this Thread 
Display Modes  

