ESS OF ECON LL\AC 11E
ESS OF ECON LL\AC 11E
11th Edition
ISBN: 9781264093083
Author: SCHILLER
Publisher: MCG
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Chapter 2, Problem 6QFD
To determine

Possible effects ofprogressive taxes on the total output.

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An actuary analyzes a company’s annual personal auto claims, M and annual commercialauto claims, N . The analysis reveals that V ar(M ) = 1600, V ar(N ) = 900, and thecorrelation between M and N is ρ = 0.64. Compute V ar(M + N ).
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