STATISTICS F/BUSINESS+ECONOMICS-TEXT
13th Edition
ISBN: 9781305881884
Author: Anderson
Publisher: CENGAGE L
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Textbook Question
Chapter 7, Problem 42SE
Jack Lawler, a financial analyst, wants to prepare an article on the Shadow Stock portfolio developed by the American Association of Individual Investors (AAII). A list of the 30 companies in the Shadow Stock portfolio as of March 2014 is contained in the DATAfile named ShadowStocks (AAII website March 27, 2014). Jack would like to select a simple random sample of 5 of these companies for an interview concerning management practices.
- a. In the DATAfile the Shadow Stock companies are listed in column A of an Excel worksheet. In column B we have generated a random number for each of the companies. Use these random numbers to select a simple random sample of 5 of these companies for Jack.
- b. Generate a new set of random numbers and use them to select a new simple random sample. Did you select the same companies?
a.
Expert Solution
To determine
Draw a random sample of 5 of the companies of Jack.
Answer to Problem 42SE
The random sample of 5 of these companies are tabulated below,
| Company |
Random Number |
| Hardinge Inc. (HDNG) | 0.4298384 |
| Medical Action Industries (MDCI) | 0.3792011 |
| Mitcham Industries, Inc. (MIND) | 0.4257654 |
| Rocky Brands Inc (RCKY) | 0.7556817 |
| Willis Lease Finance Corporati (WLFC) | 0.9063183 |
Explanation of Solution
Calculation:
Answers may vary. One of the possible answers is given:
The given data represents the Shadow Stock of 30 companies.
Software procedure:
Step-by-step software procedure to obtain a random samples using MINITAB software:
- Click on Calc > Random Data > Sample from columns.
- In Number of rows to sample, enter 5.
- In the Store in column, enter column C2.
- Click OK.
- Click on Data > Display Data
- Select C2.
- Click Ok.
Output using MINITAB software is as follows:
Therefore, the random sample of 5 of these companies is,
| Company |
Random Number |
| Hardinge Inc. (HDNG) | 0.4298384 |
| Medical Action Industries (MDCI) | 0.3792011 |
| Mitcham Industries, Inc. (MIND) | 0.4257654 |
| Rocky Brands Inc (RCKY) | 0.7556817 |
| Willis Lease Finance Corporati (WLFC) | 0.9063183 |
b.
Expert Solution
To determine
Generate a new simple random sample and compare it with the sample in part (a).
Answer to Problem 42SE
The random sample of 5 of these companies is,
| Company |
Random Number |
| Marlin Business Services Corp. (MRLN) | 0.6827254 |
| International Shipholding Corp (ISH) | 0.227759457 |
| VOXX International Corp (VOXX) | 0.629674789 |
| Hardinge Inc. (HDNG) | 0.429838402 |
| Rocky Brands Inc (RCKY) | 0.755681737 |
The random samples in these data set does not match with the random samples of part (a).
Explanation of Solution
Calculation:
Software procedure:
Step-by-step software procedure to obtain a random sample using MINITAB software is as follows,
- Click on Calc > Random Data > Sample from columns.
- In Number of rows to sample, enter 5.
- In the Store in column, enter column C2.
- Click OK
- Click on Data > Display Data
- Select C2.
- Click Ok.
Output using MINITAB software is as follows,
Therefore the random sample of 5 of these companies is,
| Company |
Random Number |
| Marlin Business Services Corp. (MRLN) | 0.6827254 |
| International Shipholding Corp (ISH) | 0.227759457 |
| VOXX International Corp (VOXX) | 0.629674789 |
| Hardinge Inc. (HDNG) | 0.429838402 |
| Rocky Brands Inc (RCKY) | 0.755681737 |
Here, it is observed that the drawn sample is not same as the sample drawn in part (a).
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Could you please answer this question using excel.Thanks
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An insurance company's cumulative incurred claims for the last 5 accident years are given
in the following table:
Development Year
Accident Year 0
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245 267 274 289 292
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2020
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2021
263 278
2022
271
It can be assumed that claims are fully run off after 4 years. The premiums received for
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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.
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78
S
205
122
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24
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Chapter 7 Solutions
STATISTICS F/BUSINESS+ECONOMICS-TEXT
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