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Question 1 of 10
1. Question
What is the correct definition for a premium?
Correct
Premium is the particular amount that is paid over a period of time to the insurer by the insured for covering his risk. For taking this risk, the insurer charges a fixed amount called the premium. The premium includes different variables like the age of the insured, the type of employment he has and his medical conditions, etc.
Incorrect
Premium is the particular amount that is paid over a period of time to the insurer by the insured for covering his risk. For taking this risk, the insurer charges a fixed amount called the premium. The premium includes different variables like the age of the insured, the type of employment he has and his medical conditions, etc.
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Question 2 of 10
2. Question
What do you understand by the important branch of actuarial science called credibility theory?
Correct
The credibility theory consists of applications of Bayesian statistics in a general insurance context. The methods are concerned with setting a premium for risk, taking into account the recent claims experience of the risk and usually that of other comparable risks.
Incorrect
The credibility theory consists of applications of Bayesian statistics in a general insurance context. The methods are concerned with setting a premium for risk, taking into account the recent claims experience of the risk and usually that of other comparable risks.
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Question 3 of 10
3. Question
What is referred to as the pure premium?
Correct
The expected mean risk is referred to as the pure premium for the risk and is denoted by E[S ].
Incorrect
The expected mean risk is referred to as the pure premium for the risk and is denoted by E[S ].
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Question 4 of 10
4. Question
When it is supposed that the premium charged each year by the insurer to insure the risk is P, what does this statement denote: P > E[S ]?
Correct
It means that the insurer is wisely charging more than the pure premium, but the cumulative surplus on this business may at some point become negative.
Incorrect
It means that the insurer is wisely charging more than the pure premium, but the cumulative surplus on this business may at some point become negative.
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Question 5 of 10
5. Question
When it is supposed that the premium charged each year by the insurer to insure the risk is P, what does this statement denote: P = E[S ]?
Correct
It means that the insurer is charging only the pure premium and making no provision for statistical variation in the risk, in particular for outcomes in which the risk exceeds its expected value.
Incorrect
It means that the insurer is charging only the pure premium and making no provision for statistical variation in the risk, in particular for outcomes in which the risk exceeds its expected value.
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Question 6 of 10
6. Question
When it is supposed that the premium charged each year by the insurer to insure the risk is P, what does this statement denote:P < E[S ]?
Correct
This denotes that the insurer is unwisely charging less than the expected risk, and the cumulative surplus on the business will eventually become negative regardless of the initial surplus.
Incorrect
This denotes that the insurer is unwisely charging less than the expected risk, and the cumulative surplus on the business will eventually become negative regardless of the initial surplus.
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Question 7 of 10
7. Question
The zero utility principle is also known as ZUP, requires different pieces of knowledge for its usage, which out if this can you authenticate with it?
Correct
The use of ZUP requires a knowledge of the insurer’s utility function and non-exponential-form utility functions also require knowledge of the insurer’s initial wealth; it also requires knowledge of certain expectation properties of the random variable S.
Incorrect
The use of ZUP requires a knowledge of the insurer’s utility function and non-exponential-form utility functions also require knowledge of the insurer’s initial wealth; it also requires knowledge of certain expectation properties of the random variable S.
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Question 8 of 10
8. Question
The exponential premium principle that is also known as EPP, requires different pieces of knowledge for its usage, which out if this can you authenticate with it?
Correct
The use of the exponential premium principle -EPP requires knowledge of the moment generating function of S.
Incorrect
The use of the exponential premium principle -EPP requires knowledge of the moment generating function of S.
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Question 9 of 10
9. Question
What type of method is referred to as the empirical Bayesian method?
Correct
To estimate the premium for risk, the risk is set in a collective of comparable risks for which has been relevant data over the past several years. The information from the collateral data enables us to proceed using a similar approach to the Bayesian method, but with the advantage that allows the collateral data to provide the information on between risk data. The method is known as an empirical Bayesian method.
Incorrect
To estimate the premium for risk, the risk is set in a collective of comparable risks for which has been relevant data over the past several years. The information from the collateral data enables us to proceed using a similar approach to the Bayesian method, but with the advantage that allows the collateral data to provide the information on between risk data. The method is known as an empirical Bayesian method.
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Question 10 of 10
10. Question
What are these three quantities, E[m(θ)], E[s2(θ)] and Var[m(θ) referred to as?
Correct
In Lemma, the estimator involves three quantities, E[m(θ)], E[s2(θ)], and Var[m(θ)], which are estimated from collateral data. These quantities are referred to as the three structural parameters.
Incorrect
In Lemma, the estimator involves three quantities, E[m(θ)], E[s2(θ)], and Var[m(θ)], which are estimated from collateral data. These quantities are referred to as the three structural parameters.