D.W. Simpson Worldwide Actuarial Recruitment Life Health Pension Casualty US Asia Australia Europe Salary Apply Ezra Penland Actuarial Recruiters Top Actuary Jobs Salary Surveys Apply Bios Casualty Health Life Pension ACTEX Publications / MadRiver Books The Experts in Actuarial Education Serving students worldwide for over 40 years S.C. Inernational, Ltd. Recruiting Actuaries and Risk Prof. Since 1986 Actuarial Jobs     Surveys     For Employers Pauline Reimer, ASA, MAAA Pryor AssociatesActuarial Openings: Life, P&C, Health, Pensions, Finance Actuarial Careers, Inc. ® Actuarial Jobs WorldwideSearch positions: Geographic Region, Specialization, Salary

# Thread: Is there a trick to this problem?

Oh man... are you kidding me? lol... will this work for all exponential function? can anyone prove this?
anyway, the "trick" doesn't make sense to me... it would make more sense if it was 7/(6+7) since you want the probability that the Deluxe happens first.

I didn't get to order statistic since my friend who passed the test already said it wont be on exam P, I can see that it'll help though.

Thank you ctperng!
You are welcome!

But the information from your friend is incorrect. Order statistic in on the syllabus: See

http://www.soa.org/files/pdf/edu-catfall07-exam-p.pdf
(part 3. item transformations and order statistics)

The previous trick works for expenential distributions as can be seen from my two proofs, either using order statistics or by direct integrations.

This makes sense, because if the mean is higher, the probability of first occurence should be lower. Of course, if I have time I can also show a different way of looking at this phenomenon.

Anyway, good luck on your study!

ctperng

2. The first time I tried this problem I tried doing P(D<B), or P(D-B>0). I then calculated E(D-B)=3-2=1. The variance is sqrt(3^2+2^2)=sqrt(13).
I then did (0-1)/sqrt(13)=-.277, which returns a probability of .3936. What is the reason that normal approximation doesn't work here? Is it because there is nothing that says that there are at least 30 independent claims?

There are currently 1 users browsing this thread. (0 members and 1 guests)

#### Posting Permissions

• You may not post new threads
• You may not post replies
• You may not post attachments
• You may not edit your posts
•