Home Forums SOA Exams – FSA GIADV Exam – Variance Formula

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    Pi In the Sky

      Can someone please help me understand why the calculation of Variance alternates between?

      1) Sum (Loss^2) x Prob x (1-Prob)

      2) Sum Prob x (Loss^2) – E[Loss]^2

      Unless I am applying them wrong, they yield different answers but both have been used in exam solutions (e.g. Spring 2019 #1 uses formula 1 while Spring 2020 # 5 uses 2)……

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