EBK BUSINESS ANALYTICS
3rd Edition
ISBN: 9780135231906
Author: Evans
Publisher: VST
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Chapter 8, Problem 2PE
To determine
To construct: A scatter chart and find the type of model that is best for the provided data. Also, find the model equation using the Trendline tool.
Expert Solution & Answer
Answer to Problem 2PE
The best model for the given data is linear model.
Explanation of Solution
Given information:
The data set is:
| Price | Demand |
| $11 | 2180 |
| $13 | 2020 |
| $17 | 1980 |
| $19 | 1900 |
Graph:
The
- Enter data in excel sheet.
- Select the data of Price and Demand.
- Click on Insert > Charts > Scatter.
The obtained scatterplot is:
Interpretation:
From the above constructed scatterplot, it is clear that the data points of provided data set are forming straight line downward patter which implies that the linear model is appropriate for the given data set.
Hence, linear model is best representing the given data set.
Calculation:
Follow the provided steps of excel to find the trendline equation:
- Select the chart.
- Click on + symbol and select Trendline and click on more options.
- Select the Regression Type as linear.
- Tick on Display equation on chart.
The obtained results is
Hence, the required trendline is y=-30x+2470.
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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.
From a sample of 26 graduate students, the mean number of months of work experience prior to entering an MBA program was 34.67. The national standard deviation is known to be18 months. What is a 90% confidence interval for the population mean?
Question content area bottom
Part 1
A
9090%
confidence interval for the population mean is
left bracket nothing comma nothing right bracketenter your response here,enter your response here.
(Use ascending order. Round to two decimal places as needed.)
Chapter 8 Solutions
EBK BUSINESS ANALYTICS
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