CAS Exam MAS-I Fall 2018, Question 16
Study guide: Exam MAS-I
Losses occur independently with the probabilities as described below:
| Loss Size | Probability |
|---|---|
| 0 | 25% |
| 2 | 60% |
| 6 | 15% |
Using a sample of size 2, the variance of individual losses is estimated using the sample variance given by:
\sum_{i=1}^{2}(x_i - \bar{x})^2
Calculate the mean square error of this estimator.
- A) Less than 8.0
- B) At least 8.0, but less than 16.0
- C) At least 16.0, but less than 24.0
- D) At least 24.0, but less than 32.0
- E) At least 32.0
Answer this question and see the worked solution