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24. Summary statistics on aggregate claims for each of four car rental com- pany risks over five years are given in Table 5.12 below. Here Xij denotes aggregate claims in year j for risk i. Using Model 1 of empirical Bayes credibility, calculate the credibility factor and credibility premium for risk 1. In your opinion, is Model 1 suitable to calculate credibility pre- miums for these risks? TABLE 5.12 Car rental company risks. Risk Xi Σ₁j=1(Xij - X₁)² 1 6,132 5,321,643 2 7,465 5,974,212 3 4,927 4,321,615 4 23,416 41,271,314

24. Summary statistics on aggregate claims for each of four car rental com- pany risks over five years are given in Table 5.12 below. Here Xij denotes aggregate claims in year j for risk i. Using Model 1 of empirical Bayes credibility, calculate the credibility factor and credibility premium for risk 1. In your opinion, is Model 1 suitable to calculate credibility pre- miums for these risks? TABLE 5.12 Car rental company risks. Risk Xi Σ₁j=1(Xij - X₁)² 1 6,132 5,321,643 2 7,465 5,974,212 3 4,927 4,321,615 4 23,416 41,271,314

MATLAB: An Introduction with Applications
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
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24. Summary statistics on aggregate claims for each of four car rental com- pany risks over five years are given in Table 5.12 below. Here Xij denotes aggregate claims in year j for risk i. Using Model 1 of empirical Bayes credibility, calculate the credibility factor and credibility premium for risk 1. In your opinion, is Model 1 suitable to calculate credibility pre- miums for these risks? TABLE 5.12 Car rental company risks. Risk Xi Σ₁j=1(Xij - X₁)² 1 6,132 5,321,643 2 7,465 5,974,212 3 4,927 4,321,615 4 23,416 41,271,314
Transcribed Image Text:24. Summary statistics on aggregate claims for each of four car rental com- pany risks over five years are given in Table 5.12 below. Here Xij denotes aggregate claims in year j for risk i. Using Model 1 of empirical Bayes credibility, calculate the credibility factor and credibility premium for risk 1. In your opinion, is Model 1 suitable to calculate credibility pre- miums for these risks? TABLE 5.12 Car rental company risks. Risk Xi Σ₁j=1(Xij - X₁)² 1 6,132 5,321,643 2 7,465 5,974,212 3 4,927 4,321,615 4 23,416 41,271,314
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