SOA Exam FAM Sample Question 56
Study guide: Exam FAM
For a group of policies, you are given:
(i) Losses follow the distribution function
F(x) = 1 - \theta/x, \quad x > \theta.
(ii) A sample of 20 losses resulted in the following:
| Interval | Number of Losses |
|---|---|
| (0,10] | 9 |
| (10, 25] | 6 |
(25, \infty) |
5 |
Calculate the maximum likelihood estimate of \theta.
- A) 5.00
- B) 5.50
- C) 5.75
- D) 6.00
- E) 6.25
Answer this question and see the worked solution