Exam MAS-I Practice Question 12
Study guide: Exam MAS-I
Annual claim rates across a portfolio follow a gamma distribution with \alpha = 2 and \theta = 0.1, so the mean rate is 0.2. Given its rate, each insured's claims follow a Poisson process.
- Insured A has had 1 claim in 1 year.
- Insured B has had 2 claims in 4 years.
Calculate the posterior mean of each insured's claim rate.
- A) A: 0.273; B: 0.227
- B) A: 0.273; B: 0.286
- C) A: 0.300; B: 0.400
- D) A: 0.467; B: 0.400
- E) A: 1.000; B: 0.500
Answer this question and see the worked solution