Homework Problems Stat 490C

Chapter 2 1. 2. %. Model 1 is a uniform distribution from 0 to 100. Determine the table entries for a generalized uniform distribution covering the range from a to b where a < b. Let X be a discrete random variable with probabilit function p!x" # 2!1$%"x for x # 1& 2& %& ' (hat is the probabilit that X is odd) *or a distribution where x + 2& ou are given, -he hazard rate function, h(x) # z2$2x & for x + 2 F(5) # 0../.

0alculate z. /. 4. *X!t" # !t211"$2222 for 1<3<100. 0alculate fX!40". 5ou are given that the random variable X is distributed as a (eibull distribution with parameters 6 # % and 7 # 0.4. 0alculate, a. 8r9X < 4: b. 8r9% < X < 4: !<preadsheet 8roblem" 5ou are given that the random variable X is distributed as a =eometric distribution with parameters > # %. 0alculate, a. 8r9X < 4: b. 8r9% < X < 4: @ (eibull Distribution with parameter 7 # 1 becomes what distribution) @ random variable X has a densit function f!3" # /3!1A32"1%& for 3 + 0. Determine the mode of X.

;.

?. ..

Chapter 3 2. Determine the following for a generalized uniform distribution covering the range from a to b where a < d < b, a. B9Xk: b. B9X: c. Car!X" d. e!d" *or the 8areto distribution& determine B9X:& Car!X"& and the coefficient of variation in terms of D and 6.

10.

Homework Problems Stat 490C

11. 12. 1%. *or the =amma distribution& determine B9X:& Car!X"& the coefficient of variation& and sEewness in terms of D and 6. *or the B3ponential distribution& determine B9X:& Car!X"& and e!d" in terms of 6. 5ou are given, x%$2?& for 0 < x < % *!x" # 1& for x +% 0alculate, a. b. c. d. e. f. 1/. B9X: Car!X" e!1" B9!X11"A: B9X F 2: -he Median

!<preadsheet" Gf ou roll two fair die& X is the sum of the dice. 0alculate, a. b. c. d. e. f. g. B9X: Car!X" e!/" B9!X1/"A: B9X F 10: -he Mode H20

14.

5ou are given a sample of 2& 2& %& 4& .. *or this empirical distribution& determine, a. -he mean b. -he variance c. -he standard deviation d. -he coefficient of variation e. -he sEewness f. -he Eurtosis g. -he probabilit generating function -he random variable X is distributed e3ponentiall with 6 # 0.2. 0alculate B9e2X:. I Losses follow a 8areto distribution has parameters of D # ? and 6 # 10&000. 0alculate e!4&000"

1;. 1?.

Homework Problems Stat 490C

1.. -he amount of an individual claim has a 8areto distribution with 6 # .000 and D # 2. Jse the central limit theorem to appro3imate the probabilit that the sum of 400 independent claims will e3ceed 440&000.

Chapter 4 12. -he distribution function for losses from our renterKs insurance is the following, *!x" # 1 L 0..91000$!1000A3":4 L 0.2912000$!12000A3":% 0alculate, a. B9X: b. Car!X" c. Jse the normal appro3imation to determine the probabilit that the sum of 100 independent claims will not e3ceed 200&000. 20. I X has a Murr distribution with parameters D # 1& N # 2& and 6 # 10000.4. 5 has a 8areto distribution with parameters D # 1 and 6 # 1000. O is a mi3ture of X and 5 with ePual weights on each component. Determine the median of O. -he random variable X is distributed as a 8areto distribution with parameters D and 6. B!X" # 1 and Car!X" # %. -he random variable 5 is ePual to 2X. 0alculate the Car!5". I 0laim severities are modeled using a continuous distribution and inflation impacts claims uniforml at an annual rate of s. (hich of the following are true statements regarding the distribution of claim severities after the effect of inflation) i. @n e3ponential distribution will have a scale parameter of !1As"6. ii. @ 8areto distribution will have scale parameters !1As"D and !1As"6. iii. @n Gnverse =aussian distribution will have a scale parameter of !1As"6. I -he aggregate losses of Biffel @uto Gnsurance are denoted in euro currenc and follow a Lognormal distribution with Q # . and R # 2. =iven that 1 euro # 1.% dollars& determine the lognormal parameters for the distribution of BiffelKs losses in dollars. !<preadsheet" 0alculate S!1.4". -he random variable X is the number of dental claims in a ear and is distributed as a gamma distribution given parameter 6 and with parameter D # 1. 6 is distributed uniforml between 1 and %. 0alculate B!X" and Car!X".

21.

22.

2%.

2/. 24.

Homework Problems Stat 490C

2;. @ dental insurance compan has 1000 insureds. @ssume the number of claims from each insured is independent. Jsing the information in 8roblem 24 and the normal appro3imation& calculate the probabilit that the 0ompan will incur more than 2100 claims. I Let T have a 8oisson distribution with mean F. Let F have a uniform distribution on the interval !0&4". Determine the unconditional probabilit that T + 2. -he number of hospitalization claims in a ear follows a 8oisson distribution with a mean of U. -he probabilit of e3actl three claims during a ear is ;0V of the probabilit that there will be 2 claims. Determine the probabilit that there will be 4 claims. Gf the number of claims is distributed as a 8oison distribution with U # %& calculate, a. 8r!T # 0" b. 8r!T # 1" c. 8r!T # 2" d. B!T" e. Car!T" Gf the number of claims is distributed as a zero truncated 8oison distribution with U # %& calculate, a. 8r!T # 0" b. 8r!T # 1" c. 8r!T # 2" d. B!T" e. Car!T" Gf the number of claims is distributed as a zero modified 8oison distribution with U # % and p0M # 0.4& calculate, a. 8r!T # 0" b. 8r!T # 1" c. 8r!T # 2" d. B!T" e. Car!T" Gf the number of claims is distributed as a =eometric distribution with > # %& calculate, a. 8r!T # 0" b. 8r!T # 1" c. 8r!T # 2" d. B!T" e. Car!T"

2?.

2..

22.

%0.

%1.

%2.

Homework Problems Stat 490C

%%. !<preadsheet" Gf the number of claims is distributed as a Minomial distribution with m # ; and P # 0./& calculate, a. 8r!T # 0" b. 8r!T # 1" c. 8r!T # 2" d. B!T" e. Car!T" !<preadsheet" Gf the number of claims is distributed as a Tegative Minomial distribution with N # % and > # 2& calculate, a. 8r!T # 0" b. 8r!T # 1" c. 8r!T # 2" d. B!T" e. Car!T" !<preadsheet" Gf the number of claims is distributed as a Logarithmic distribution with > # %& calculate, a. 8r!T # 0" b. 8r!T # 1" c. 8r!T # 2" d. B!T" e. Car!T" I -he Gndependent Gnsurance 0ompan insures 24 risEs& each with a /V probabilit of loss. -he probabilities of loss are independent. (hat is the probabilit of / or more losses in the same ear) !Wint, Jse the binomial distribution." I 5ou are given a negative binomial distribution with N # 2.4 and > # 4. *or what value of k does pk taEe on its largest value) I N is a discrete random variable form the !a, b, 0" class of distributions. -he following information is Enown about the distribution, 8!T # 0" # 0.%2?;.0 8!T # 1" # 0.%2?;.0 8!T # 2" # 0.12;;0. B9T: # 1.24 Mased on this information& which of the following are true statements) G. GG. GGG. 8!T # %" # 0.10?2;4 T is from a binomial distribution. T is from a Tegative Minomial Distribution.

%/.

%4.

%;.

%?. %..

Homework Problems Stat 490C

%2. I 5ou are given, 0laims are reported at a 8oisson rate of 4 per ear. -he probabilit that a claim will settle for less than 100&000 is 0.2. (hat is the probabilit that no claim of 100&000 or more will be reported in the ne3t three ears) T is distributed as a zero modified geometric distribution with > # % and p0M # 0.4. 0alculate, a. e!2" b. Car9T X %: c. B9!T12"A:

/0.

Chapter 5 /1. Losses are distributed B3ponentiall with 6 # 1000. Losses are subYect to an ordinar deductible of 400. 0alculate, a. f5L! " b. *5L! " c. <5L! " d. B!5L" e. -he loss elimination ratio Losses are distributed B3ponentiall with parameter 6 # 1000. Losses are subYect to an ordinar deductible of 400. 0alculate, a. f58! " b. *58! " c. B!58" Losses are distributed B3ponentiall with 6 # 1000. Losses are subYect to a franchise deductible of 400. 0alculate, a. f5L! " b. *5L! " c. <5L! " d. B!5L" e. -he loss elimination ratio Losses are distributed B3ponentiall with parameter 6 # 1000. Losses are subYect to a franchise deductible of 400. 0alculate, a. f58! " b. *58! " c. B!58"

/2.

/%.

//.

Homework Problems Stat 490C

/4. Last ear& losses were distributed B3ponentiall with 6 # 1000. -his ear losses are subYect to 10V inflation. Losses in both ears are subYect to an ordinar deductible of 400. 0alculate the following for this ear, a. B!5L" b. B!58" /;. I Losses follow an e3ponential distribution with parameter 6. *or a deductible of 100& the e3pected pa ment per loss is 2000. (hat is the e3pected pa ment per loss in terms of 6 for a deductible of 400) I Gn ear 200?& claim amounts have the following 8areto distribution *!x" # 1 L !.00$9xA.00:"% -he annual inflation rate is .V. @ franchise deductible of %00 will be implemented in 200.. 0alculate the loss elimination ration of the franchise deductible. /.. !<preadsheet" Gf ou roll two fair die& X is the sum of the dice. Let X represent the distribution of losses from a particular event. Gf an ordinar deductible of % is applied& calculate, a. b. c. d. /2. B!5L" B!58" Car!5L" Car!58"

/?.

Losses are distributed uniforml between 0 and 100&000. @n insurance polic which covers the losses has a 10&000 deductible and an .0&000 upper limit. -he upper limit is applied prior to appl ing the deductible. 0alculate, a. b. c. d. B!5L" B!58" Car!5L" Car!58"

40.

Last ear& losses were distributed B3ponentiall with 6 # 1000. -his ear losses are subYect to 24V inflation. Losses in both ears are subYect to an ordinar deductible of 400& an upper limit of /000& and coinsurance of 20V 0alculate the following for this ear, a. B!5L" b. B!58"

Homework Problems Stat 490C

41. I @n insurance compan offers two t pes of policies, - pe Z and - pe [. - pe Z has no deductible& but has a polic limit of %000. - pe [ has no limit& but has an ordinar deductible of d. Losses follow a 8areto distribution with 6 # 2000 and D # %. 0alculate the deductible d such that both policies have the same e3pected cost per loss. 42. I (ell -raveled Gnsurance 0ompan sells a travel insurance polic that reimburses travelers for an e3pense incurred for a planned vacation that is cancelled because of airline banEruptcies. Gndividual claims follow a 8areto distribution with D # 2 and 6 # 400. (ell -raveled imposes a limit of 1000 on each claim. Gf a planned polic holderKs planned vacation is cancelled due to airline banEruptc and he or she has incurred more than 1000 of e3penses& what is the e3pected non1reimbursable amount of the claim) Gf X is uniforml distributed on from 0 to b. @n ordinar deductible of d is applied. 0alculate, a. B95L: b. Car95L: c. B958: d. Car958: Losses follow a 8areto distribution with D # % and 6 # 200. @ polic covers the loss e3cept for a franchise deductible of 40. X is the random variable representing the amount paid b the insurance compan per pa ment. 0alculate the e3pected value of the X. Losses in 200? are uniforml distributed between 0 and 100&000. @n insurance polic pa s for all claims in e3cess of an ordinar deductible of \20&000. *or 200.& claims will be subYect to uniform inflation of 20V. -he 0ompan implements an upper limit u !without changing the deductible" so that the e3pected cost per loss in 200. is the same as the e3pected cost per loss in 200?. 0alculate u. Losses follow an e3ponential distribution with a standard deviation of 100. @n insurance compan applies a polic deductible d which results in a Loss Blimination [atio of 0.1.1%. 0alculate d. Losses are distributed following the single parameter 8areto !Tot the same as the 8areto distribution in Zuestion 4/" with D # / and 6 # 20. @n insurance polic is issued with a deductible of 100. 0alculate the Car!5L".

4%.

4/.

44.

4;.

4?.

Homework Problems Stat 490C

4.. Losses follow a 8areto distribution with D # 4 and 6 # 2000. @ polic pa s 100V of losses from 400 to 1000. Gn other words& if a loss occurs for less than 400& no pa ment is made. Gf a loss occurs which e3ceeds 1000& no pa ment is made. Wowever& if a loss occurs which is between 400 and 1000& then the entire amount of the loss is paid. 0alculate B!58". I 5ou are given the following, Losses follow a lognormal distribution with parameters Q #10 and R # 1. *or each loss less than or ePual to 40&000& the insurer maEes no pa ment. *or each loss greater than 40&000& the insurer pa s the entire amount of the loss up to the ma3imum covered loss of 100&000. Determine the e3pected amount of the loss. 5ou are given the following, Losses follow a distribution prior to the application of an deductible with a mean of 2000. -he loss elimination ratio at a deductible of 1000 is 0.%. ;0V of the losses in number are less than the deductible of 1000. Determine the average size of the loss that is less than the deductible of 1000. Losses follow a 8areto distribution with D # 4 and 6 # 2000. @n insurance polic covering these losses has a deductible of 100 and maEes pa ments directl to the ph sician. @dditionall & the ph sician is entitled to a bonus if the loss is less than 400. -he bonus is 10V of the difference between 400 and the amount of the loss. -he following table should help clarif the arrangement, Amount of Loss 40 100 240 /00 400 1000 Loss Payment 0 0 140 %00 /00 200 Bonus /4 /0 24 10 0 0

42.

;0.

;1.

0alculate the e3pected total pa ment !loss pa ment plus bonus" from the insurance polic to the ph sician per loss.

Homework Problems Stat 490C

Chapter ;2. I *or an insured& 5 is the random variable representing the total amount of time spent in a hospital each ear. -he distribution of the number of hospital admissions in a ear is, !umber of A"m#ss#ons 0 1 2 Probab#l#ty 0.;0 0.%0 0.10

-he distribution of the length of each sta for an admission follows a =amma distribution with D # 1 and 6 # 4. 0alculate B95: and Car95:. ;%. *or an insurance compan & each loss has a mean of 100 and a variance of 100. -he number of losses follows a 8oisson distribution with a mean of 400. Bach loss and the number of losses are mutuall independent. -he loss ratio for the insurance compan is defined as the ratio of aggregate losses to the total premium collected. -he premium collected is 110V of the e3pected aggregate losses. Jsing the normal appro3imation& calculate the probabilit that the loss ratio will e3ceed 24V. ;/. @n automobile insurer has 1000 cars covered during 200?. -he number of automobile claims for each car follows a negative binomial distribution with > # 1 and N # 1.4. Bach claim is distributed e3ponentiall with a mean of 4000. @ssume that the number of claims and the amount of the loss are independent and identicall distributed. Jsing the normal distribution as an appro3imating distribution of aggregate losses& calculate the probabilit that losses will e3ceed . million.

Homework Problems Stat 490C

;4. X1& X2& and X% are mutuall independent random variables. -hese random variables have the following probabilit functions, x 0 1 2 % 0alculate f<!x". ;;. ;?. -he number of claims follows a 8oisson distribution with a mean of %. -he distribution of claims is fX!1" # 1$% and fX!2" # 2$%. 0alculate f<!/". !<preadsheet" -he number of claims and the amount of each claim is mutuall independent. -he frePuenc distribution is, n 1 2 % / 4 ; -he severit distribution is, x 100 200 %00 /00 400 ;00 ?00 .00 f'%x& 0.24 0.20 0.14 0.12 0.10 0.0. 0.0; 0.0/ pn 0.04 0.20 0.%0 0.24 0.14 0.04 f$%x& 0.; 0./ 0.0 0.0 f2%x& 0./ 0.% 0.2 0.1 f3%x& 0.1 0./ 0.4 0.0

0alculate f<!x". !<ee B3ample ;.; in the booE for an e3ample."

Homework Problems Stat 490C

;.. 5ou are given the following table for aggregate claims, S 0 100 200 %00 /00 400 ;00 (S%s& 0.40 0.;4 0.?4 )*%'+"&,-

;0

Losses can onl occur in multiples of 100. 0alculate the net stop loss premium for stop loss insurance covering losses in e3cess of %24. ;2. I Losses follow a 8oisson frePuenc distribution with a mean of 2 per ear. -he amount of a loss is 1& 2& or % with each having a probabilit of 1$%. Loss amounts are independent of the number of losses and from each other. @n insurance polic covers all losses in a ear subYect to an annual aggregate deductible of 2. 0alculate the e3pected claim pa ments for this insurance polic . ?0. 8urdue Jniversit has decided to provide a new benefit to each class at the universit . Bach class will be provided with group life insurance. <tudents in each class will have 10&000 of coverage while the professor for the class will have 20&000. <-@- /200 has 2? students all age 22 split 12 males and 14 females. -he class also has an aging professor. -he probabilit of death for each is listed below, A.e /en"er Probab#l#ty of 0eath 22 Male .004 22 *emale .00% 42 Male .020 8urdue purchases a <top Loss 8olic such with an aggregate deductible of 20&000. 0alculate the net premium that 8urdue will pa for the stop loss coverage.

Homework Problems Stat 490C

?1. *or an automobile polic & the severit distribution is =amma with D # % and 6 # 1000. -he number of claims in a ear is distributed as follows, !umber of Cla#ms 1 2 % / 0alculate, a. B!<" b. Car!<" c. M<!t" ?2. !<preadsheet" 5ou are given that the number of losses follow a 8oisson with U # ;. Losses are distributed as follows, fX!1" # fX!2" # fX!/" # 1$%. *ind f<!3" for total losses of 100 or less. ]n a given da & a doctor provides medical care for T@ adults and T0 children. @ssume that T@ and T0 have 8oisson distributions with parameters % and 2 respectivel . -he distributions for the length of care per patient are as follows, 1#me 1 hour 2 hours A"ult 0./ 0.; Ch#l" 0.2 0.1 Probab#l#ty .;4 .20 .10 .04

?%.

Let T@& T0& and the lengths of sta for all patients be independent. -he doctor charges 200 per hour. Determine the probabilit that the office income on a given da will be less than or ePual to .00. ?/. !<preadsheet" Losses follow a 8areto distribution with D # 1 and 6 # 1000. a. Jsing the Method of [ounding with a span of 100& calculate fj for 0 < j <1000. 0alculate the mean of the discretized distribution. 0ompare this mean to the actual mean. b. Jsing the Method of Local Moment Matching and matching the mean !with E # 1" and a span of 100& calculate fj for 0 < j <1000. 0alculate the mean of the discretized distribution. (h does this mean not ePual the actual mean) Jsing the e3ample that was handed out in class& find f<!;" and f<!?". I 5ou are given, a. < has a compound 8oisson distribution with U # 2^ and b. Gndividual claim amounts 3 are distributed as follows,

?4. ?;.

Homework Problems Stat 490C

fX!1" # 0./ and fX!2" # 0.; Determine f<!/".

Homework Problems Stat 490C

??. I @ggregate claims < has a compound 8oisson distribution with discrete individual claim amount distributions of fX!1" # 1$% and fX!%" # 2$%. @lso& f<!/" # f<!%" A ;f<!1". 0alculate the Car!<". ?.. I *or aggregate claims <& ou are given, a. f !X" # f ! x" e
In X
<

40

!40" n_

n =0

b. Losses are distributed as follows, 2 1 2 % Determine Car!<" ?2. (ith no deductible& the number of pa ments for losses under warrant coverage for an Gphone follows a negative binomial distribution with a mean of 0.24 and a variance of 0.%?4. -he compan imposes a deductible of d such that the number of e3pected pa ments for losses is reduced to 40V of the prior e3pected pa ments. 0alculate the Car !T8" after the imposition of the deductible. .0. I 8rior to the application of an deductible& aggregate claim counts during 2004 followed a 8oisson with U # 1/. <imilarl & individual claim sizes followed a 8areto with D # % and 6 # 1000. @nnual inflation for the claim sizes is 10V. @ll policies in 2004 and 200; are subYect to a 240 ordinar deductible. 0alculate the increase in the number of claims that e3ceed the deductible in 200; when compared to 2004. f'%2& 0./ 0.4 0.1

Homework Problems Stat 490C

.1. I @n insurance portfolio produces T claims with the following distribution, n 0 1 2 P%!3n& 0.1 0.4 0./

Gndividual claim amounts have the following distribution, 2 0 10 20 f'%2& 0.? 0.2 0.1

Gndividual claim amounts and counts are independent. <top Loss insurance is purchased with an aggregate deductible of /00V of e3pected claims. 0alculate the net stop loss premium. .2. Losses are modeled assuming that the amount of all losses is /0 and that the number of losses follows a geometric distribution with a mean of /. 0alculate the net stop loss premium for coverage with an aggregate deductible of 100. I @n aggregate claim distribution has the following characteristics, 89< # i: # 1$; for i # 1& 2& %& /& 4& or ;. @ stop loss insurance with a deductible amount of d has an e3pected insurance pa ment of 1.4 Determine d. ./. 8urdue Jniversit has decided to provide a new benefit to each class at the universit . Bach class will be provided with group life insurance. <tudents in each class will have 10&000 of coverage while the professor for the class will have 20&000. <-@- /200 has 2? students all age 22 split 12 males and 14 females. -he class also has an aging professor. -he probabilit of death for each is listed below, A.e /en"er Probab#l#ty of 0eath 22 Male .004 22 *emale .00% 42 Male .020 -he insurance compan providing the coverage charges a premium ePual to the e3pected claims plus one standard deviation. 0alculate the premium.

.%.

Homework Problems Stat 490C

.4. I @n insurer provides life insurance for the following group of independent lives, !umber of L#4es 100 200 %00 0eath Benef#t 1 2 % Probab#l#ty of 0eath 0.01 0.02 0.0%

-he insurer purchases reinsurance with a retention of 2 on each life. -he reinsurer charges a premium of W ePual to the its e3pected claims plus the standard deviation of its claims. -he insurer charges a premium of = which is ePual to its e3pected retained claims plus the standard deviation of the retained claims plus W 0alculate =. .;. I -wo portfolios of independent insurance policies have the following characteristics, Class 1 2 Class 1 2 !umber #n Class 2000 400 !umber #n Class 2000 400 Portfol#o A Probab#l#ty of Cla#m 0.04 0.10 Portfol#o B Probab#l#ty of Cla#m 0.04 0.10 Cla#m Amount Per Pol#5y 1 2 Cla#m Amount 0#str#but#on 6ean 7ar#an5e 1 1 2 /

-he aggregate claims in the portfolios are denoted b <@ and <M& respectivel . 0alculate Car9<M:$Car9<@:.

Homework Problems Stat 490C

.?. I @n insurance compan is selling policies to individuals with independent future lifetimes and identical mortalit profiles. *or each individual& the probabilit of death b all causes is 0.10 and the probabilit of death due to an accident is 0.01. Bach insurance polic pa s a benefit of 10 for an accidental death and 1 for non1 accidental death. -he compan wishes to have at least 24V confidence that premiums with a relative securit loading of 0.20 are adePuate to cover claims. !Gn other words& the premium is 1.20B!<"." Jsing the normal appro3imation& determine the minimum number of policies that must be sold. ... 0hen 0asualt 0ompan writes insurance the covers tsunamis onl . Gf a tsunami occurs& 0hen pa s a benefit of 1 million. -he benefit is paid at the time of the tsunami. -he distribution of annual tsunami claims is as follows, !umber of 1sunam#s 0 1 2 Probab#l#ty 0.20 0.0. 0.02

0hen collects a premium of 0.14 million at the beginning of the ear. 0hen does not have an e3penses nor does the 0ompan earn interest. 0hen has a surplus ePual to ten times one earKs e3pected claims. 0alculate the probabilit that 0hen is still solvent after 2 ears. .2. Mrown @ssurance 0ompan has a surplus of % at the end of 200;. Bach ear Mrown collects premiums of 4 at the beginning of the calendar ear. During the calendar ear& Mrown earns 10V interest. @t the end of the calendar uear& Mrown pa s an losses incurred. -he distribution of annual losses is 0& 4& and 10 with a probabilit of 0.%& 0.4& and 0.2 respectivel . 0alculate the probabilit of ruin prior to the end of 2002.

Homework Problems Stat 490C

20. Mauer Mlasting 0ompan !MM0" self insures its emplo ee life insurance. @t the end of 200;& the life insurance fund has a surplus of 4&000. @t the beginning of each calendar ear& MM0 contributes 20&000 into the life insurance fund. -he fund earns interest at /V. Gf a MM0 emplo ee dies on the Yob& MM0 provides a death benefit of \10&000 per death at the end of the calendar ear. -he distribution of deaths each ear is, 0eaths 1 2 % Probab#l#ty 0.2 0.4 0.%

0alculate the probabilit of ruin for the life insurance fund within % ears. 21. I 5ou are given, a. Gnitial <urplus is 10. b. @nnual losses are distributed as follows, Annual Losses 0 10 20 %0 Probab#l#ty 0.;0 0.24 0.10 0.04

c. 8remiums paid at the beginning of the ear are ePual to e3pected losses for the ear. d. Gf surplus increases in the ear& a dividend is paid at the end of the ear. -he dividend is ePual to half the increase in surplus. e. -here are no other cash flows. 0alculate the probabilit of ruin during the first two ears. 22. I -he number of maYor hurricanes that hit the island nation of `ustcoast is given b a 8oisson process with 0.100 storms e3pected per ear. `ustcoast establishes a fund that will pa 100 per storm. -he fund charges an annual premium& pa able at the start of each ear& of 10. @t the start of this ear !before the premium is paid"& the fund has ;4. 0laims are paid immediatel when there is a storm. Gf the fund ever runs out of mone & it immediatel ceases to e3ist. -here are no e3penses and the fund does not earn an interest. (hat is the probabilit that the fund is still functioning in 10 ears)

Homework Problems Stat 490C

2%. I @ random sample& X1& X2& '& Xn& is drawn from a distribution with a mean of 2$% and a variance of 1$1..
a # !X1 A X2 A ' A Xn"$!n11" is the estimator of the distribution mean . a ". *ind M<B!

2/.

I 0laim sizes are uniforml distributed over the interval 90& 6:. @ sample of 10 claims& denoted b X1& X2& '&X10 was observed and an estimate of 6 was obtained using,
a # 5 # ma3!X1& X2& '&X10"

[ecall that the probabilit densit function for 5 is, f5! " # 10 2$610 a for 6 #100. 0alculate the mean sPuare error for 24. I 5ou are given two independent estimates of an unEnown Puantit 6, a @" # 1000 and R! a @" # /00 a. Bstimator @, B! a a b. Bstimator M, B! M" # 1200 and R! M" # 200 Bstimator 0 is a weighted average of Bstimator @ and Bstimator M such that,
a 0 # !w" a @ A !11w" aM a 0". Determine the value of w that minimizes R!

Homework Problems Stat 490C

2;. I 5ou are given, 2 0 1 2 % Pr%' 3 2& 0.4 0.% 0.1 0.1

Jsing a sample size of n& the population mean is estimated b the sample mean X . -he variance is estimated b ,

! X" S n # Xn
2
i

0alculate the bias of <2 n when n # /. 2?. I *or the random variable X& ou are given, a. B!X" # 6& 6 + 0 b. Car!6" # 62$24 a # EX$!EA1" c. d. M<B6!6" # 29bias 6!6":2 Determine E. 2.. 5ou are given the following sample of claims, X, 12& 1%& 1;& 1;& 22& 2/& 2;& 2;& 2.& %0 -he sum of X is 21% and the sum of X2 is /221. W0 is that Q3 # 1? and W1 is that Q3 + 1?. 0alculate the z statistic& the critical value!s" assuming a significance level of 1V& and the p value. <tate our conclusion with regard to the W pothesis -esting.

Homework Problems Stat 490C

(ang (arrant 0orporation is testing i8ods. (ang starts with 100 i8ods and tests them b dropping them on the ground. (ang records the number of drops before each i8od will no longer pla . -he following data is collected from this test, 0rops to (a#lure 1 2 / ; ? . !umber ; 2 % / / 4 0rops to (a#lure 2 10 11 12 1% 22 !umber ? ; ? ? /. 1

Ledbetter Life Gnsurance 0ompan is completing a mortalit stud on a % ear term insurance polic . -he following data is available,
L#fe 1 2 % / 4 ; ? . 2 10 11 12 1% 1/ 14 1; 1? 1. 12 20 0ate of )ntry 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0.4 0.4 1.0 1.0 2.0 0ate of )2#t 0.2 0.% 0./ 0.4 0.4 0.4 1.0 %.0 %.0 %.0 %.0 %.0 %.0 %.0 %.0 2.0 1.0 %.0 %.0 2.4 8eason for )2#t Lapse Death Lapse Death Death Lapse Death B3pir of 8olic B3pir of 8olic B3pir of 8olic B3pir of 8olic B3pir of 8olic B3pir of 8olic B3pir of 8olic B3pir of 8olic Lapse Death B3pir of 8olic B3pir of 8olic Death

<chneider -rucEing 0ompan had the following losses during 200;, Amount of Cla#m 0 L 10 10120 201%0 %0 A -otal !umber of Payments . 4 / % 20 1otal Amount of Losses ;0 ?0 110 200 //0

Homework Problems Stat 490C

22.

Jsing the data from (ang (arrant 0orporation& calculate, a. p100!3" b. *100!3" c. -he empirical mean d. -he empirical variance e. b!3" where b!3" is the cumulative hazard function from the Telson calen estimate f. d!3" where d!3" is the survival function from the Telson calen estimate 100. Jsing the data from <chneider -rucEing 0ompan & calculate, a. -he ogive& *20!3" b. -he histogram& f20!3" c. B!XF%0" minus B9!X120"A: 101. I 5ou are given, Cla#m S#9e %'& !0&24: !24&40: !40&100: !100&200: !umber of Cla#ms %0 %2 20 .

@ssume a uniform distribution of claim sizes within each interval. Bstimate the mean of the claim size distribution. Bstimate the second raw moment of the claim size distribution. Chapter $$ 102. @ mortalit stud is completed on %0 people. -he following deaths occur during the five ears, % deaths at time 1.0 / deaths at time 2.0 4 deaths at time %.0 . deaths at time %.. 10 deaths at time /.4 -here were no other terminations and no lives entered the stud after the start of the stud . -he data was smoothed using a uniform Eernel with a bandwidth of 1. 0alculate a (x) for all x + 0. and F
a f

(x)

Homework Problems Stat 490C

10%. I *rom a population having a distribution function *& ou are given the following sample, 2.0& %.%& %.%& /.0& /.0& /.?& /.?& /.? 0alculate the Eernel densit estimate of *!/"& using a uniform Eernel with bandwidth of 1./. 10/. I 5ou stud five lives to estimate the time from the onset of a disease until death. -he times to death are, 2 % % % ? Jsing a triangular Eernel with a bandwidth of 2& estimate the densit function at 2.4. 104. 5ou are given the following random sample, 12 14 2? /2

-he data is smoothed using a uniform Eernel with a bandwidth of ;. 0alculate the mean and variance of the smoothed distribution. 10;. 5ou are given the following random sample, 12 14 2? /2

-he data is smoothed using a triangular Eernel with a bandwidth of 12. 0alculate the mean and variance of the smoothed distribution. 10?. 5ou are given the following random sample, 12 14 2? /2

-he data is smoothed using a gamma Eernel with a bandwidth of %. 0alculate the mean and variance of the smoothed distribution.

Homework Problems Stat 490C

Chapter $2 10.. 5ou are given the following sample of claims obtained from an #n4erse gamma distribution, X, 12& 1%& 1;& 1;& 22& 2/& 2;& 2;& 2.& %0 -he sum of X is 21% and the sum of X2 is /221. 0alculate D and 6 using the method of moments. 102. I 5ou are given the following sample of five claims, / 4 21 22 /21 *ind the parameters of a 8areto distribution using the method of moments. 110. I @ random sample of death records ields the follow e3act ages at death, %0 40 ;0 ;0 ?0 20 -he age at death from which the sample is drawn follows a gamma distribution. -he parameters are estimated using the method of moments. Determine the estimate of D. 111. I 5ou are given the following, -he random variable X has the densit function f!x" # Dx1D11 & 1 < x < e& D +1 @ random sample is taEen of the random variable X.

0alculate the estimate of D in terms of the sample mean using the method of moments. 112. I 5ou are given the following, -he random variable X has the densit function f!x" # f2!6 L x"g$62& 0 < x < 6 @ random sample of two observations of X ields values of 0.40 and 0.?0. Determine 6 using the method of moments.

Homework Problems Stat 490C

11%. 5ou are given the following sample of claims, X, 12& 1%& 1;& 1;& 22& 2/& 2;& 2;& 2.& %0 0alculate the smoothed empirical estimate of the /0th percentile of this distribution. 11/. I *or a complete stud of five lives& ou are given, a. Deaths occur at times t # 2& %& %& 4& ?. b. -he underl ing survival distribution <!t" # /1Ut& t + 0 Jsing percentile matching at the median& calculate the estimate of U. 114. 5ou are given the following 2 claims, X, 10& ;0& .0& 120& 140& 1?0& 120& 2%0& 240 -he sum of X # 12;0 and the sum of X2 # 22?&/00. -he data is modeled using an e3ponential distribution with parameters estimated using the percentile matching method. 0alculate 6 based on the empirical value of 120. 11;. I *or a sample of 10 claims& 31 < 32 < ' < 310 ou are given, a. -he smoothed empirical estimate of the 44th percentile is %.0. b. -he smoothed empirical estimate of the ;0th percentile is /02. Determine 3;. 11?. 5ou are given the following, a. Losses follow a 8areto distribution with parameters D and 6. b. -he 10th percentile of the distribution is 6 L E& where E is a constant. c. -he 20th percentile of the distribution is 46 L %E. Determine D.

Homework Problems Stat 490C

11.. 5ou are given the following random sample of % data points from a population with a 8areto distribution with 6 # ?0, X, 14 2? /%

0alculate the ma3imum liEelihood estimate for D. 112. I 5ou are given, a. Losses follow an e3ponential distribution with mean 6. b. @ random sample of 20 losses is distributed as follows, 8an.e 90&1000: !1000& 2000" !2000&e" (re:uen5y ? ; ?

0alculate the ma3imum liEelihood estimate of 6. 120. I 5ou are given the following, -he random variable X has the densit function f!x" # f2!6 L x"g$62& 0 < x < 6 @ random sample of two observations of X ields values of 0.40 and 0.20. Determine the ma3imum liEelihood estimate for 6. 121. I 5ou are given, a. -en lives are subYect to the survival function <!t" # !11t$E"0.4& 0 < t < E b. -he first two deaths in the sample occured at time t # 10. c. -he stud ends at time t # 10. 0alculate the ma3imum liEelihood estimate of E. 122. I 5ou are given the following, a. -he random variable X follows the e3ponential distribution with parameter 6. b. @ random sample of three observations of X ields values of 0.%0& 0.44& and 0..0 Determine the ma3imum liEelihood estimate of 6.

Homework Problems Stat 490C

12%. I -en laborator mice are observed for a period of five da s. <even mice die during the observation period& with the following distribution of deaths, 1#me of 0eath #n 0ays 2 % / 4 !umber of 0eaths 1 2 1 %

-he lives in the stud are subYect to an e3ponential survival function with mean of 6. 0alculate the ma3imum liEelihood estimate of 6. 12/. I @ polic has an ordinar deductible of 100 and a polic limit of 1000. 5ou observe the following 10 pa ments, 14 40 1?0 21; /00 ;20 ?40 200 200 200 @n e3ponential distribution is fitted to the ground up distribution function& using the ma3imum liEelihood estimate. Determine the estimated parameter 6. 124. I *our lives are observed from time t # 0 until death. Deaths occur at t # 1& 2& %& and /. -he lives are assumed to follow a (eibull distribution with 7 # 2. Determine the ma3imum liEelihood estimator for 6. 12;. I -he random variable X has a uniform distribution on the interval 90&6:. @ random sample of three observations of X are recorded and grouped as follows, ;nter4al 90&E" 9E&4" 94&6: !umber of <bser4at#ons 1 1 1

0alculate the ma3imum liEelihood estimate of 6

Homework Problems Stat 490C

12?. I @ random sample of three claims from a dental insurance plan is given below, 224 424 240

0laims are assumed to follow a 8areto distribution with parameters 6 # 140 and D. Determine the ma3imum liEelihood estimate of D. 12.. I -he following claim sizes are e3perienced on an insurance coverages, 100 400 1&000 4&000 10&000

5ou fit a lognormal distribution to this e3perience using ma3imum liEelihood. Determine the resulting estimate of R.

5ou are given the following data from a sample, k 0 1 2 % / 4 Jse this data for the ne3t four problems. 122. @ssuming a Minomial Distribution& estimate m and P using the Method of Moments. 1%0. @ssuming a Minomial Distribution& find the MLB of P given that m # ;. 1%1. !<preadsheet" @ssuming a Minomial Distribution& find the MLB of m and P. 1%2. @ssuming a 8oisson Distribution& appro3imate the 20V confidence interval for the true value of U. nk 20 24 %0 14 . 2

Homework Problems Stat 490C

1%%. 5ou are given the following 20 claims, X, 10& /0& ;0& ;4& ?4& .0& 120& 140& 1?0& 120& 2%0& %/0& /%0& //0& 2.0& ;00& ;?4& 240& 1240& 1?00 -he data is being modeled using an e3ponential distribution with 6 # /2?.4. 0alculate D!200". 1%/. 5ou are given the following 20 claims, X, 10& /0& ;0& ;4& ?4& .0& 120& 140& 1?0& 120& 2%0& %/0& /%0& //0& 2.0& ;00& ;?4& 240& 1240& 1?00 -he data is being modeled using an e3ponential distribution with 6 # /2?.4. 5ou are developing a p-p plot for this data. (hat are the coordinates for 3? # 120. 1%4. MarE the following statements -rue or *alse with regard to the holmogorov1 <mirnov test, -he holmogorov1<mirnov test ma be used on grouped data as well as individual data. Gf the parameters of the distribution being tested are estimated& the critical values do not need to be adYusted. Gf the upper limit is less than e& the critical values need to be larger. 1%;. MalogKs MaEer has worEersK compensation claims during a month of, 100& %40& 440& 1000 MalogKs owner& a retired actuar & believes that the claims are distributed e3ponentiall with 6 # 400. We decides to test his h pothesis at a 10V significance level. 0alculate the holmogorov1<mirnov test statistic. <tate the critical value for his test and state his conclusion. We also tests his h pothesis using the @nderson1Darling test statistic. <tate the values of this test statistic under which Mr. <chmidt would reYect his h pothesis.

Homework Problems Stat 490C

1%?. I -he observations of 1.?& 1.;& 1.;& and 1.2 are taEen from a random sample. 5ou wish to test the goodness of fit of a distribution with probabilit densit function given b f!3" # 0.43 for 0 < 3 < 2. Jsing the holmogorov1<mirnov statistic& which of the following should ou do) a. b. c. d. e. @ccept at both levels @ccept at the 0.01 level but reYect at the 0.10 level @ccept at the 0.10 level but reYect at the 0.01 level [eYect at both levels 0annot be determined.

1%.. I -wo lives are observed beginning at time t#0. ]ne dies at time 4 and the other dies at time 2. -he survival function <!t" # 1 L !t$10" is h pothesized. 0alculate the holmogorov1<mirnov statistic. 1%2. I *rom a laborator stud of nine lives& ou are given, a. -he times of death are 1& 2& /& 4& 4& ?& .& 2& 2 b. Gt has been h pothesized that the underl ing distribution is uniform with i # 11. 0alculate the holmogorov1<mirnov statistic for the h pothesis. 1/0. 5ou are given the following data, Cla#m 8an.e 01100 1001200 2001400 40011000 1000A Count %0 24 20 14 10

W0, -he data is from a 8areto distribution. W1, -he data is not from a 8areto distribution. 5our boss has used the data to estimate the parameters as D # / and 6 # 1200. 0alculate the chi1sPuare test statistic. 0alculate the critical value at a 10V significance level. <tate whether ou would reYect the 8areto at a 10V significance level.

Homework Problems Stat 490C

1/1. During a one1 ear period& the number of accidents per da in the parEing lot of the <teenman <teel *actor is distributed, !umber of A55#"ents 0 1 2 % /A 0ays 220 100 %0 10 4

W0, -he distribution of the number of accidents is distributed as 8oison with a mean of 0.;24. W1, -he distribution of the number of accidents is not distributed as 8oison with a mean of 0.;24. 0alculate the chi1sPuare statistic. 0alculate the critical value at a 10V significance level. <tate whether ou would reYect the W0 at a 10V significance level. 1/2. I 5ou are given the following random sample of automobile claims, 4/ 1/0 2%0 4;0 ;00 1&100 1&400 1&.00 1&220 2&000 2&/40 2&400 2&4.0 2&210 %&.00 %&.00 %&.10 %&.?0 /&000 /&.00 ?&200 ?&%20 11&?40 12&000 14&000 24&000 %0&000 %2&200 %4&000 44&000 5ou test the h pothesis that automobile claims follow a continuous distribution *!3" with the following percentiles, 2 *!3" 3$0 0.1; 500 0.2? 2=49> 0.44 4=>? 0..1 ?=49> 0.20 $2=930 0.24

5ou group the data using the largest number of groups such that the e3pected number of claims in each group is at least 4. 0alculate the 0hi1<Puare goodness1of1fit statistic.

Homework Problems Stat 490C

1/%. Mased on a random sample& ou are testing the following h pothesis, W0, -he data is from a population distributed binomial with m # ; and P # 0.%. W1, -he data is from a population distributed binomial. 5ou are also given, L!@0" # .1 and L!@1" # .% 0alculate the test statistic for the LiEelihood [atio -est <tate the critical value at the 10V significance level 1//. <tate whether the following are true or false -he principle of parsimon states that a more comple3 model is better because it will alwa s match the data better. Gn Yudgment1based approaches to determining a model& a modelerKs e3perience is critical. Gn most cases& Yudgment is rePuired in using a score1based approach to selecting a model.

Chapter $? 1/4. @ random number generated from a uniform distribution on !0& 1" is 0.;. Jsing the inverse transformation method& calculate the simulated value of X assuming, X is distributed 8areto with D # % and 6 # 2000 0.43 0.; 0.43 10.; 0.13 11 0.043 0 < 3 < 1.2 1.2 < 3 < 2./ 2./ < 3 < %.2 10 < 3 < 14 14 < 3 < 20

*!3" #

*!3" #

Homework Problems Stat 490C

1/;. I 5ou are given that f!3" # !1$2"32 for 0 < 3 < %. 5ou are to simulate three observations from the distribution using the inversion method. -he follow three random numbers were generated from the uniform distribution on 90&1:, 0.00. 0.?22 0.124

Jsing the three simulated observations& estimate the mean of the distribution. 1/?. I 5ou are to simulate four observations from a binomial distribution with two trials and probabilit of success of 0.%0. -he following random numbers are generated from the uniform distribution on 90&1:, 0.21 0.21 0.?2 0./.

Determine the number of simulated observations for which the number of successes ePuals zero. 1/.. h le has an automobile insurance polic . -he polic has a deductible of 400 for each claim. h le is responsible for pa ment of the deductible. -he number of claims follows a 8oison distribution with a mean of 2. @utomobile claims are distributed e3ponentiall with a mean of 1000. h le uses simulation to estimate the claims. @ random number is first used to calculate the number of claims. -hen each claim is estimated using random numbers using the inverse transformation method. -he random numbers generated from a uniform distribution on !0& 1" are 0.?& 0.1& 0.4& 0..& 0.%& 0.?& 0.2. 0alculate the simulated amount that h le would have to pa in the first ear.

Homework Problems Stat 490C

1/2. I Gnsurance for a cit Ks snow removal costs covers four winter months. 5ou are given, -here is a deductible of 10&000 per month. -he insurer assumes that the cit Ks monthl costs are independent and normall distributed with mean of 14&000 and standard deviation of 2000. -o simulate four months of claim costs& the insurer uses the inversion method !where small random numbers correspond to low costs". -he four numbers drawn from the uniform distribution on 90&1: are, 0.4%2. 0.1141 0.001% 0.?..1

0alculate the insurerKs simulated claim cost. 140. I @nnual dental claims are modeled as a compound 8oisson process where the number of claims has mean of 2 and the loss amounts have a two1parameter 8areto distribution with 6 # 400 and D # 2. @n insurance pa s .0V of the first ?40 and 100V of annual losses in e3cess of ?40. 5ou simulate the number of claims and loss amounts using the inversion method. -he random number to simulate the number of claims is 0..0. -he random numbers to simulate the amount of claims are 0.;0& 0.24& 0.?0& 0.10& and 0..0. 0alculate the simulated insurance claims for one ear. 141. @ sample of two selected from a uniform distribution over !1&J" produces the following values, % ?

5ou estimate J as the Ma3!X1& X2". Bstimate the Mean <Puare Brror of our estimate of J using the bootstrap method.

Homework Problems Stat 490C

142. I -hree observed values from the random variable X are, 1 1 /

5ou estimate the third central moment of X using the estimator, g!X1& X2& X%" # 1$% j!XY 1 X "% Determine the bootstrap estimate of the mean1sPuared error of g.

Homework Problems Stat 490C Answers

1. 2. %. /. 4. ;. ?. .. 2. a. 0..22 b. 0.2// To @nswer =iven 1$l4 a. b. c. d. 10. a. 6$!D11" b. D62$9!D11"2!D12": c. 9D$! D12":0.4 11. a. b. c. d. 12. a. 6 b. 62 c. 6 1%. a. b. c. d. e. f. 2.24 2?$.0 1?$1% %/$2? 40$2? 2.%.11 6D 62D 1$lD 2$lD !bEA1 L aEA1"$!b1a"!EA1" !bAa"$2 !b1a"2$12 !b1d"$2 Tot 8rovided k 2 100$2222 a. 0.?24 b. 0.02%

Homework Problems Stat 490C Answers

1/. a. b. c. d. e. f. g. 14. a. / b. 4.2 c. 2.2. d. 0.4? e. 0..02; f. 2.1/4 g. 0./z2 A 0.2z% A 0.2z4 A 0.2z. 4$% 2400 0.02// a. 1/00 b. 2;&2?%&%%% c. .?.?V 100 12 i onl . Me sure to indicate how to maEe the others true. Q # ..2; and R # 2.00 0...;22? 2 and 1/$% ?.2V 0.;02/ 2.;V a. b. c. d. e. %0. a. b. c. d. e. 0 0.14?2 0.2%4. %.14?2 2.;;02 0.0/2. 0.1/2/ 0.22/0 % % ? 4..%%% %.?%%% %.1111 ;..... ? 4

1;. 1?. 1.. 12.

20. 21. 22. 2%. 2/. 24. 2;. 2?. 2.. 22.

Homework Problems Stat 490C Answers

%1. a. b. c. d. e. %2. a. b. c. d. e. %%. a. b. c. d. e. %/. a. b. c. d. e. %4. a. 0 b. 0.4/10 c. 0.2022 d. 2.1;/0 e. %.2?%1 0.01;4 ? <tatement GGG is onl true statement 0.22%1 a. / b. 1.;2/% c. 1.124 0.0%?0 0.0?/1 0.02.. ; 1. 0.0/;? 0.1.;; 0.%110 2./ 1.// 0.2400 0.1.?4 0.1/0; % 12 0.4000 0.0?.; 0.11?2 1.4?.; %..22/

%;. %?. %.. %2. /0.

Homework Problems Stat 490C Answers

/1. a. f5L! " # 1 L e10.4& # 0 f5L! " # 0.001e1!0.001 A 0.4"& b. *5L! " # 1 L e10.4& *5L! " # 1 L e1!.001 c. <5L! " # e10.4& <5L! " # e1!.001 d. 1000e10.4 e. 1 L e10.4 /2. a. f58! " # 0.001e10.001 b. *58! " # 1 L e1.001 c. 1000 /%. a. f5L! " # 1 L e10.4& # 0 f5L! " # 0.001e10.001 & + 0 b. *5L! " # 1 L e10.4& #0 *5L! " # 1 L e1.001 & + 0 c. <5L! " # e10.4& #0 <5L! " # e1.001 & +0 d. 1400e10.4 e. 1 L 1.4e10.4 //. a. f58! " # 0.001e10.001 A0.4 b. *58! " # 1 L e1.001 c. 1400
A0.4 A 0.4" A 0.4"

+0 +0

#0 & +0

#0 &

Homework Problems Stat 490C Answers

/4. /;. /?. /.. a. 1100e1!0.4$1.1" b. 1100 2000e1/00$6 0.1;4 a. b. c. d. /2. a. b. c. d. 40. a. ;22.4; b. 2%2.12 41. 42. 4%. 1.2.1. 1400 a. !b1d"2$2b b. 9!b1d"%$%b: L 9!b1d"2$2b:2 c. !b1d"$2 d. !b1d"2$12 1?4 ?1&.%%.;2 20 1?0..?0 ?04.0; 1;&22/ %%%.%% /%1..% 2.4 and 2%.?4 0.14.? 0.0;. %.&400 /2&???.?. ;/1&0.%&%%% 422&%20&?2. /.02?. /.%2 4.4. /./.

4/. 44. 4;. 4?. 4.. 42. ;0. ;1. ;2. ;%. ;/.

Homework Problems Stat 490C

;4.
x 0 1 2 3 4 5 6 fS(x) 0.024 0.130 0.280 0.280 0.180 0.086 0.020

;;. ;?. ;.. ;2. ?0. ?1.

0.141/%; Tone provided 41.24 2.%;0.2/ 22.;0 a. /&;40 b. 11&%??&400 c. 0.;4!111000t"1% A 0.2!111000t"1; A 0.1!111000t"12 A 0.04!111000t"112 To @nswer 8rovided 0.2%./ a. Mean # /2..;1 b. Mean # /22..4 0.10;2?. and 0.0;0122 0.141? ?; 1;4 0.14;24 0./0; 0.22/ 22.1; 2.24 4&?2? /;.1% 2.1 12?4 0.24/ 0.%0 0.4/% 0.2??4 0.;24/ !nA."$91.!n11"2: 141.42 1$4 10.2/

?2. ?%. ?/. ?4. ?;. ??. ?.. ?2. .0. .1. .2. .%. ./. .4. .;. .?. ... .2. 20. 21. 22. 2%. 2/. 24. 2;.

Homework Problems Stat 490C

2?. 2.. 22. 2 1 2 / ; ? . 2 10 11 12 1% 22 p$00%2& 0.0; 0.02 0.0% 0.0/ 0.0/ 0.04 0.0? 0.0; 0.0? 0.0? 0./. 0.01 2 3<1 1<3<2 2<3</ /<3<; ;<3<? ?<3<. .<3<2 2<3<10 10<3<11 11<3<12 12<3<1% 1%<3<22 3+22 ($00%2& 0 0.0; 0.0. 0.11 0.14 0.12 0.2/ 0.%1 0.%? 0.// 0.41 0.22 1.00 A%2& 0 0.0;0000 0.0.12?? 0.11%..4 0.14..22 0.204... 0.2;?;1; 0.%42?22 0.//;;?. 0.44??.2 0.;.2?.2 1.;;2%.1 2.;;2%.1 B%2& 1 0.2/1?;4 0.2212%2 0..22%;0 0..4%1/2 0..1%22/ 0.?;4201 0.;2?.?1 0.;%2?40 0.4?2/?% 0.40420; 0.1.2;.? 0.0;2?.2 4 z # 2.0.1/^ critical value # 2.%%^ <ince 2.0.1/ is less than 2.%%& we cannot reYect the null h pothesis^ p # 0.01..

Bmpirical Mean # 10.// and Bmpirical Cariance # 1/./0;/ 100. a. 0.0/3 for 0 < 3 < 10 0.14 A 0.0243 for 10 < 3 < 20 0.24 A 0.023 for 20 < 3 < %0 Jndefined for 3 + %0 b. 0.0/ for 0 < 3 < 10 0.024 for 10 < 3 < 20 0.02 for 20 < 3 < %0 Jndefined for 3 + %0 c. . 101. /?.40 and %24..%%%%%%%%% 102. 2 f%2& 3<0 0 0<3<1 %$;0 1<3<2 ?$;0 2 < 3 < 2.. 2$;0 2.. < 3 < %.0 1?$;0 %.0 < 3 < %.4 1%$;0 %.4 < 3 < / 2%$;0 / < 3 < /.. 1.$;0 /.. < 3 < 4.4 10$;0 4.4 < 3 0

(%2& 0 %3$;0 !?31/"$;0 !231."$;0 !1?31%0./"$;0 !1%311../"$;0 !2%314%./"$;0 !1.31%%./"$;0 !103A4"$;0 1

Homework Problems Stat 490C

10%. 10/. 104. 10;. 10?. 10.. 102. 110. 111. 112. 11%. 11/. 114. 11;. 11?. 11.. 112. 120. 121. 122. 12%. 12/. 124. 12;. 12?. 12.. 122. 1%0. 1%1. 1%2. 1%%. 1%/. 1%4. 1%;. 0.4%124 0.% Mean # 2/ and Cariance # 141.40 Mean # 2/ and Cariance # 1;%.40 Mean # 2/ and Cariance # %?..00 D # 1%..12 and 6 # 2?2..2 D # %..1..2 and 6 # %10.0?.2 10..
X $! X 1"

1%?. 1%.. 1%2. 1/0. 1/1. 1/2. 1/%. 1//.

1.. 1../ 1$; 2%/.21 %?. 2 %.002 122;.20 1.4 24 0.44 ; ?0% 2.?%.; ?.4 0.;?2. 1.;/%; m # %0 and P # 0.04?%%%%%%% 0.2.;;? m # 2; and P # 0.0;;14/ !1.40/2;& 1.2%4?/" 0.12;/ !1$%&0.2//?" @ll <tatements are false. 0.24%/& 0.;1& 0annot reYect& 10V #+ [eYect at @2 + 1.2%% 4V #+ [eYect at @2 + 2./22 1V #+ [eYect at @2 + %..4? M 0.4 0.1.1. m2 # 4.4100^ critical value # /.;04^ [eYect W0 m2 # 1..4^ critical value # ?.??2^ [eYect W0 ;.;4.; - # 2.12?^ critical value # /.;04 *alse^ -rue^ -rue

Homework Problems Stat 490C

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