Unformatted text preview: Name: Awrwatiézv UNIVERSITY OF ILLINOIS AT URBANACHAMPAIGN
Department of Mathematics
ACTUARIAL SCIENCE PROGRAM Math 476 / 567 Prof. Rick Gorvett
Actuarial Risk Theory Fall, 2010 InClass Assignment # 7 (2 problems worth 1 point each)
Tuesday, October 26, 2010 This assignment is openbook, open—note, and you may work together in groups of no more than
4. Each student must hand in her/his own answer sheet. Please circle your ﬁnal answers. Suppose that you are an actuary for a small insurance company. Your assignment is to
simulate aggregate losses which your company will incur next year on a particular type of
insurance policy. You decide on the following distributions for the number of claims, and for individual claim severity: 0 Number of Claims: N ~ Discrete Uniform: p(i) = 0.20, i = 1, 2, 3, 4, 5.
= Individual claim severity: X ~ Continuous Uniform [0, 100,000} You use the following random numbers: 0 For number of claims: 0.38
o For severity (use as many as necessary, in the order given): 0.73, 0.41, 0.97,
0.08, 0.52 Use these random numbers according to the convention that lower random numbers
correspond with lower claim number and size values. (1) Identify the simulated number of claims.
U: 0.20.4 =2) naé
(2) Calculate the simulated aggregate losses.
' .LL ,1...—
A} .73(l°0,000) :: 93,000
"H o‘fl (l0°,ooc) ’Q 46000 ...
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 Winter '08
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