CAS Exam 7 Spring 2017, Question 13

Study guide: Exam 7

A stochastic loss reserving model estimates that ultimate losses have an expected value of $70 million with a 90% confidence interval from $60 million to $84 million.

Part a (1 point)

Assume the following histogram was produced during model validation:

Describe what is implied by the histogram about the accuracy of the expected value and the size of the confidence interval.

Part b (1 point)

The following p-p plot was produced during model validation:

Describe what is implied by the plot about the accuracy of the expected value and the size of the confidence interval.

Part c (1 point)