Chapter 2.5, Problem 16ES

The University of the West Indies Open Campus ECON2016 Mathematical Methods of Economics II Final Assessment Instructions: Answer ALL the questions. Show all working 1. Solve the following Differential Equations a) dy = x²-1; y(-1) = 1 dx y²+1 dy b) d x + 2y = 3; dx c) dy-4y = 4y² dt d) 6dzy dx² dy -5+ y = 0; y(0) = 4 y'(0) = 0 dx [6] [5] [5] [6]

Questions An insurance company's cumulative incurred claims for the last 5 accident years are given in the following table: Development Year Accident Year 0 2018 1 2 3 4 245 267 274 289 292 2019 255 276 288 294 2020 265 283 292 2021 263 278 2022 271 It can be assumed that claims are fully run off after 4 years. The premiums received for each year are: Accident Year Premium 2018 306 2019 312 2020 318 2021 326 2022 330 You do not need to make any allowance for inflation. 1. (a) Calculate the reserve at the end of 2022 using the basic chain ladder method. (b) Calculate the reserve at the end of 2022 using the Bornhuetter-Ferguson method. 2. Comment on the differences in the reserves produced by the methods in Part 1.

Answer questions 8.1.13 and 8.2.10 respectively

To help consumers in purchasing a laptop computer, Consumer Reports calculates an overall test score for each computer tested based upon rating factors such as ergonomics, portability, performance, display, and battery life. Higher overall scores indicate better test results. The following data show the average retail price and the overall score for ten 13-inch models (Consumer Reports website, October 25, 2012). Brand & Model Price ($) Overall Score Samsung Ultrabook NP900X3C-A01US 1250 83 Apple MacBook Air MC965LL/A 1300 83 Apple MacBook Air MD231LL/A 1200 82 HP ENVY 13-2050nr Spectre XT 950 79 Sony VAIO SVS13112FXB 800 77 Acer Aspire S5-391-9880 Ultrabook 1200 74 Apple MacBook Pro MD101LL/A 1200 74 Apple MacBook Pro MD313LL/A 1000 73 Dell Inspiron I13Z-6591SLV 700 67 Samsung NP535U3C-A01US 600 63 a.  Select a scatter diagram with price as the independent variable.   b.  What does the scatter diagram developed in part (a) indicate about the relationship…

Answer questions 8.2.6, 8.2.7 and 8.2.9 respectively

To the Internal Revenue Service, the reasonableness of total itemized deductions depends on the taxpayer’s adjusted gross income. Large deductions, which include charity and medical deductions, are more reasonable for taxpayers with large adjusted gross incomes. If a taxpayer claims larger than average itemized deductions for a given level of income, the chances of an IRS audit are increased. Data (in thousands of dollars) on adjusted gross income and the average or reasonable amount of itemized deductions follow. Adjusted Gross Income ($1000s) Reasonable Amount ofItemized Deductions ($1000s) 22   9.6   27   9.6   32   10.1   48   11.1   65   13.5   85   17.7   120   25.5 Compute b1 and b0 (to 4 decimals).b1  b0  Complete the estimated regression equation (to 2 decimals). =   +  x Predict a reasonable level of total itemized deductions for a taxpayer with an adjusted gross income of $52.5 thousand (to 2 decimals).  thousand dollarsWhat is the value, in dollars, of…

Answer questions 8.1.10, 8.1.11and 8.1.12 respectively

7.2.10 Researchers in the Hopkins Forest also count the number of maple trees (genus acer) in plots throughout the forest. The following is a histogram of the number of live maples in 1002 plots sampled over the past 20 years. The average number of maples per plot was 19.86 trees with a standard deviation of 23.65 trees. a. If we took the mean of a sample of eight plots, what would be the standard error of the mean? b. Using the central limit theorem, what is the probability that the mean of the eight would be within 1 standard error of the mean? c. Why might you think that the probability that you calculated in (b) might not be very accurate?     2. A normal population has mean 100 and variance 25. How large must the random sample be if you want the standard error of the sample average to be 1.5?

Answer questions 7.3.10 and 7.3.12 respectively  7.3.12. Suppose that two independent random samples (of size n1 and n2) from two normal distributions are available. Explain how you would estimate the standard error of the difference in sample means X1 − X2 with the bootstrap method.