2011 Quiz 3

George Liu
Started: 11 March 2011 6:04
PM
Questions: 11

1.
(Points: 0)
Please read the following now, before you start the quiz, and return at the end of the quiz to
complete it.
Please ensure that you answer questions in the correct format. Do not use dollar signs or
other units in your answers, and do not use comma separators for numerical answers. For a
negative number, do not include a space between the negative sign and the number.
Please also ensure that you use the correct rounding. In all cases, round to the nearest (not
up or down). Express your answer to the number of decimal places indicated. For example,
if you are asked to round to two decimal places, and your answer is exactly 1, you should
express this as 1.00.
Answers will not score credit unless they are in the correct format and with the correct
rounding, and marks cannot be reinstated for these errors, so please do not request this.
By selecting "I agree" in response to this question, I am certifying that:
1. Although I may have discussed general content of the unit relevant to the quiz with other
students, all of the answers I am submitting are totally my own work.
2. Apart from general discussions described in 1., I have not made available to classmates
or others, my answers to this quiz.
3. I have kept and can provide to the Unit Coordinator immediately on request, a copy of
my working for this quiz.
Making this certification when it is not true will be regarded as a serious breach of the
assessment conditions.
a. I agree.
b. I do not agree. (You cannot receive credit for the quiz in this case. You should
contact the Unit Coordinator.)

2.
(Points: 0.1)
If X is exponential, then Y = X1/t is:
1. Gamma
2. Lognormal
3. Pareto
4. Weibull
5. Burr
Reason:

Looks like a Weibull to me.

3.
(Points: 0.05)
In a two variable transformation where we know the joint distribution of X1 and X2 and
where we are finding the distribution of Y1 and Y2 where Y1 = 1.1X2 - X1 and Y2 = 0.5X2,
what is the value of |J|?
Round your answer to 2 decimal places.
Answer
Reason:

So:

2.00

4.
(Points: 0.05)

The independent random variables X and Y can take values 0, 1 or 2 only. You are given
that Pr(X = 0) = 0.2, Pr(X = 1) = 0.1, Pr(Y = 0) = 0.1 and Pr(Y = 1) = 0.3.
Find Pr(X + Y = 2).
Round your answer to 2 decimal places.

Answer

0.22

Reason:

5.
(Points: 0.05)

The random variable X can take values 0, 1 or 2 only. You are given that Pr(X = 0) = 0.2
and Pr(X = 1) = 0.2.
Find the probability that three independent observations on X sum to 1, rounding your
answer to 3 decimal places.
Answer

0.024

Reason:

Since they are i.i.d.

6.
(Points: 0.05)
In maximum likelihood estimation, maximising the likelihood L, the log likelihood ln(L) or
10,000L will give the same estimates in all three cases.
True

False

Reason: Common Sense?

7.
(Points: 0.05)
Claim amounts follow an exponential distribution. In a sample of eight claims, the average
claim amount is $3,150.
Rounding your answer to 6 decimal places, calculate:
Answer

0.000317

Reason:
The mle of an exponential is given by:

Or alternatively:

8.

(Points: 0.15)
Claim amounts follow a Pareto distribution with = 4 and unknown . A sample of eight
claims gives the following claim amounts:
$500, $600, $900, $1,100, $1,200, $1,500, $5,800, $13,100.
Using the Excel Solver, and rounding your answer to the nearest whole number, calculate
the following estimate.
(Note for this and future questions that the Excel Solver function can sometimes be
unreliable. If you are having trouble getting the Solver to work, you could try:
. maximising lnL not L (L is a often a very small fraction, lnL is a negative number which
is easier to maximise)
. maximising lnL multiplied by a large constant,
. using a more accurate starting value (eg. the method of moments estimate)
. changing the Solver precision setting
. applying some constraints to the variable cells.
It is strongly suggested that you use several methods (eg. maximise L, maximise lnL, set
derivative of lnL equal to 0) and check that you get the same result, before submitting your
answer.
1.

8649

Reason:

9.

(Points: 0)
How difficult did you find this quiz, at this point in your learning (the quizzes are designed
to help with your initial learning of the main concepts of a topic)?
a. 5 = very difficult at this stage
b. 4 = a little too difficult at this stage
c. 3 = just right at this stage
d. 2 = a little too easy at this stage
e. 1 = much too easy at this stage

10.
(Points: 0)
How useful was this quiz in enhancing your learning of this topic?
a. 5 = very useful
b. 4 = useful
c. 3 = somewhat useful (please provide written feedback in the next question)
d. 2 = not very useful (please provide written feedback in the next question)
e. 1 = not useful at all (please provide written feedback in the next question)

11.
(Points: 0)
Please give your written feedback on the quiz here. Thank you for your feedback.

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