Actuarial Notes

CAS Exam MAS-II Spring 2019, Question 21

Study guide: Exam MAS-II

You are given the following:

  • h is normally distributed with mean \mu and variance 1.
  • \mu is normally distributed with mean 25 and variance 9.
  • You observe a value of h of 24.
  • The posterior distribution of h has a mean of 24.1 and a variance of 0.81.

Calculate the width of the 50% highest posterior density interval of h.

  • A) Less than 1.10
  • B) Greater than or equal to 1.10 and less than 1.15
  • C) Greater than or equal to 1.15 and less than 1.20
  • D) Greater than or equal to 1.20 and less than 1.25
  • E) Greater than or equal to 1.25

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