CAS Exam 8 Fall 2012, Question 3
Study guide: Exam 8
The table below shows property claim frequency by year for the last five years. Assume that claim frequencies are Poisson distributed with a mean of 1.5.
| Year | Exposures | Frequency |
|---|---|---|
| 2011 | 118 | 1.5 |
| 2010 | 132 | 1.7 |
| 2009 | 121 | 1.3 |
| 2008 | 109 | 1.6 |
| 2007 | 97 | 1.3 |
The critical value for the relevant chi-squared distribution is 9.49.
Part a (1.25 points)
Calculate the chi-squared test statistic for whether the claim frequency is shifting over time. Interpret the result.
Part b (0.5 points)
Describe a second method for testing whether the claim frequency is shifting over time.
Answer this question and see the worked solution