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#1
06-24-2007, 12:29 AM
 mingchenckm Member SOA Join Date: Feb 2007 Posts: 97
Do we need to memorize those distributions?

In MLC, do they expect the candidates to memorize the distributions such as gamma and Pareto?
#2
06-24-2007, 12:39 AM
 JohnLocke Member SOA Join Date: Mar 2007 Posts: 13,464

no we get tables with formulas...however, if you take 4/C you will know those *******s from repetitive use
#3
06-24-2007, 12:53 AM
 mingchenckm Member SOA Join Date: Feb 2007 Posts: 97

I don't see any tables of formulas in the Introductory study note
#4
06-24-2007, 01:45 AM
 JohnLocke Member SOA Join Date: Mar 2007 Posts: 13,464

look harder? I'll try and find a link (It may not be in the intro study note..I can't remember)
#5
06-24-2007, 02:33 AM
 Macroman Member Join Date: Sep 2001 Location: you know where Favorite beer: Mountain Dew Posts: 3,692

Gamma and Pareto are not in the MLC table.

I would say know Poisson backwards and forwards because it is used a lot and know the basics for gamma and Pareto but don't stress because they will rarely appear.
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#6
06-24-2007, 02:38 AM
 atomic Member CAS Join Date: Jul 2006 Posts: 4,088

The Loss Models appendix used to be on the old Exam M, but since the loss models material was moved to 4/C, it makes sense that the tables would no longer be needed for MLC. I don't recall needing to know anything more than Poisson and exponential distributions off the top of my head for the life contingencies material. In any case, Pareto and gamma distributions are pretty easy to memorize--which is inevitable once you sit for 4/C. Those tables are just there for convenience.
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#7
10-03-2007, 10:23 PM
 colby2152 Note Contributor SOA Join Date: Feb 2006 Location: Virginia Studying for FA, GH Core College: PSU '07 Favorite beer: Oskar Blues Old Chub Scotch Ale Posts: 4,176

Will the pdf for Gamma & Pareto distributions be given if there is a question asked about it?
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#8
10-03-2007, 11:07 PM
 actuary_zhang Member CAS SOA Join Date: Dec 2005 Location: Hyde Park College: U of C Favorite beer: Corona Posts: 153

There is no need to memorize these distributions as far as I know. But for Gamma, it is so oftern used that I memorize it without any extra effort. Both of them are easy to memorize if you want
#9
10-03-2007, 11:17 PM
 daaaave David Revelle Join Date: Feb 2006 Posts: 2,488

The textbooks on the recommended syllabus for 1/P disagree as to whether the Pareto density is
$f(x)= \frac{\alpha \theta^\alpha}{x^{\alpha+1}} , x>\theta, \quad or \quad f(x)=\frac{\alpha \theta^\alpha}{(x+\theta)^{\alpha+1}}, x>0$
Because of that, I think that it is clear that they would have to give you the density on 1/P. Unfortunately, your question is about MLC. My opinion is that if they can't assume that you know the density of a Pareto on 1/P, then they shouldn't be able to assume that you know it on MLC. But that is just my opinion, and I have never seen an official statement.

Since the Poisson process is on the syllabus, I think that you should know the Gamma density. Even if they don't directly ask about it, knowing the Gamma density allows you to compute higher moments of exponentials more quickly.
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#10
10-03-2007, 11:19 PM
 kamek85 Member Join Date: Jun 2006 Posts: 1,961

Man oh man oh man. Don't waste your time agonizing over Pareto! There are two ways to define it, so stating "such and such follows a Pareto distribution with parameters α = ... and θ = ..." is meaningless, as is "...follows a Pareto distribution with mean...". Yeah, it's true that one is assigned the prefix "single-parameter," so I suppose if you phrase it very carefully, you could summon an exam question out of it. If you're that concerned, it takes about 20 seconds to commit to memory which, incidentally, is less time than it takes to post this question on AO, and less brain space than it takes to worry about it.

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