CAS Exam 7 Spring 2015, Question 5
Study guide: Exam 7
Given the following information:
Age-to-Age Loss Development Factors
| Accident Year | 12-24 Months | 24-36 Months | 36-48 Months | 48-60 Months | 60-72 Months |
|---|---|---|---|---|---|
| 2009 | 2.50 | 1.45 | 1.06 | 1.05 | 1.01 |
| 2010 | 1.80 | 1.38 | 1.15 | 1.02 | |
| 2011 | 2.13 | 1.20 | 1.13 | ||
| 2012 | 2.18 | 1.36 | |||
| 2013 | 1.95 |
| Degrees of Freedom | t-statistic for 0.9 |
|---|---|
| 1 | 3.078 |
| 2 | 1.886 |
| 3 | 1.638 |
| 4 | 1.533 |
| 5 | 1.476 |
| 6 | 1.440 |
Assume that T = r \cdot [(n-2)/(1-r^2)]^{1/2} is t-distributed with (n-2) degrees of freedom, where r is the sample correlation coefficient.
Using Mack's correlation test with a 10% t-statistic significance standard, test the null hypothesis that the 12-24 month and 24-36 month age-to-age factors are independent.
Part a (2.5 points)
Answer this question and see the worked solution