Exam 7 Practice Question 5
Study guide: Exam 7
An actuary runs four ODP bootstrap models on the same book and weights them by accident year to obtain a best estimate of the unpaid claim distribution, as in Shapland (2016). The mean unpaid claims and the weights are:
| Accident year | Paid CL | Incurred CL | Paid BF | Incurred BF |
|---|---|---|---|---|
| 1: mean | 40 | 44 | 46 | 41 |
| 1: weight | 50% | 50% | 0% | 0% |
| 2: mean | 150 | 160 | 130 | 140 |
| 2: weight | 25% | 25% | 25% | 25% |
| 3: mean | 620 | 680 | 500 | 540 |
| 3: weight | 0% | 0% | 50% | 50% |
Following Shapland, the weighted range uses, for each accident year, only the models given weight in that year, and the modeled range is derived from the means of all the models used. Determine the weighted range and the modeled range of total unpaid claims for all accident years combined.
- A) Weighted range 670 to 744; modeled range 676 to 884
- B) Weighted range 676 to 721; modeled range 676 to 884
- C) Weighted range 670 to 744; modeled range 670 to 886
- D) Weighted range 670 to 886; modeled range 676 to 884
- E) Weighted range 676 to 884; modeled range 670 to 744
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