Actuarial Outpost MLE: Shortcut vs. First Principles
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 Short-Term Actuarial Math Old Exam C Forum

#1
01-21-2019, 09:57 PM
 HealthHoncho Member SOA Join Date: Nov 2016 Studying for C Posts: 66
MLE: Shortcut vs. First Principles

In practicing on ADAPT, I did a problem to estimate the theta parameter of a Weibull. The solution reveled what I've seen in ASM, that there are helpful shortcuts for estimation of a given distribution.
However has anyone who is preparing or passed the exam here think much of the MLE problems on the exam can be accomplished from first principles without killing too much time, if I were to be mixed up on the myriad of shortcuts? In other words, are problems designed in such a way that we should always be able to complete it using first principles in reasonable time?

What do you think?
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#2
01-21-2019, 10:30 PM
 NotSmart Member SOA Join Date: Jan 2019 Location: Hartford, CT Studying for Exam PA College: Capital Community College Posts: 82

Memorization > Understanding
#3
01-23-2019, 12:21 PM
 therealsylvos Member CAS Join Date: Mar 2014 Posts: 17,601

Quote:
 Originally Posted by HealthHoncho In practicing on ADAPT, I did a problem to estimate the theta parameter of a Weibull. The solution reveled what I've seen in ASM, that there are helpful shortcuts for estimation of a given distribution. However has anyone who is preparing or passed the exam here think much of the MLE problems on the exam can be accomplished from first principles without killing too much time, if I were to be mixed up on the myriad of shortcuts? In other words, are problems designed in such a way that we should always be able to complete it using first principles in reasonable time? What do you think?
When I took C a few years back I didn't rely on any of the shortcuts for MLE and used first principles only. It only took a bit longer and I felt more comfortable I'd get it right. If you're fast you should have enough time. But I also employed the strategy to immediately skip any non-parametric credibility question I came across, so that saved me more time for things like MLE.
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#4
01-23-2019, 01:06 PM
 jts75 Member SOA Join Date: May 2018 College: Oklahoma State Posts: 70

You will come across questions that have no shortcuts. You will actually have to use first principles to solve them. It is also helpful if you have extra time and want to double check your work doing it both ways.