CAS Exam MAS-II Spring 2019, Question 31
Study guide: Exam MAS-II
An actuary is reviewing a portfolio of auto claims, and is interested in analyzing the claim severity distribution using a Bayesian model. The portfolio's observed auto claim severity sample follows a normal distribution with mean 1,000 and standard deviation 200.
The graph below represents the samples from the posterior distribution for the mean (mu) and standard deviation (sigma).
Determine which of the following most likely represents the prior distributions used by the actuary.
- A)
\mu \sim \text{Normal}(600, 100^2);\sigma \sim \text{Uniform}(0, 200) - B)
\mu \sim \text{Normal}(600, 100^2);\sigma \sim \text{Uniform}(0, 400) - C)
\mu \sim \text{Normal}(1000, 100^2);\sigma \sim \text{Uniform}(0, 400) - D)
\mu \sim \text{Normal}(1400, 100^2);\sigma \sim \text{Uniform}(0, 400) - E)
\mu \sim \text{Normal}(2000, 100^2);\sigma \sim \text{Uniform}(0, 400)
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