(i) Annual claim frequency for an individual policyholder has mean 1 and variance o². (ii) The prior distribution for 2 is uniform on the interval [0.5, 1.5]. (iii) The prior distribution for o? is exponential with mean 1.25. A policyholder is selected at random and observed to have no claims in Year 1. Using Bühlmann credibility, estimate the number of claims in Year 2 for the selected policyholder. (A) 0.56 (В) 0.65 (C) 0.71 (D) 0.83 (E) 0.94
(i) Annual claim frequency for an individual policyholder has mean 1 and variance o². (ii) The prior distribution for 2 is uniform on the interval [0.5, 1.5]. (iii) The prior distribution for o? is exponential with mean 1.25. A policyholder is selected at random and observed to have no claims in Year 1. Using Bühlmann credibility, estimate the number of claims in Year 2 for the selected policyholder. (A) 0.56 (В) 0.65 (C) 0.71 (D) 0.83 (E) 0.94
A First Course in Probability (10th Edition)
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ISBN:9780134753119
Author:Sheldon Ross
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Chapter1: Combinatorial Analysis
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![(i)
Annual claim frequency for an individual policyholder has mean 1 and variance o².
(ii)
The prior distribution for 2 is uniform on the interval [0.5, 1.5].
(iii)
The prior distribution for o? is exponential with mean 1.25.
A policyholder is selected at random and observed to have no claims in Year 1.
Using Bühlmann credibility, estimate the number of claims in Year 2 for the selected
policyholder.
(A)
0.56
(В)
0.65
(C)
0.71
(D)
0.83
(E)
0.94](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc1dc1e8a-2f92-405b-ac65-6118ad2b4bd3%2Fb26e6853-eb4d-4564-9d15-ec9515a4c9fa%2F3k6ydwo_processed.jpeg&w=3840&q=75)
Transcribed Image Text:(i)
Annual claim frequency for an individual policyholder has mean 1 and variance o².
(ii)
The prior distribution for 2 is uniform on the interval [0.5, 1.5].
(iii)
The prior distribution for o? is exponential with mean 1.25.
A policyholder is selected at random and observed to have no claims in Year 1.
Using Bühlmann credibility, estimate the number of claims in Year 2 for the selected
policyholder.
(A)
0.56
(В)
0.65
(C)
0.71
(D)
0.83
(E)
0.94
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