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Assignment 3 - Q8

L

Leala

Member
Im getting inconsistent answers for E(m(theta)).
To calc E(m(theta)), if we use credibility premium formula, we get answer = 2. BUT using formula in the tables where it says E(m(theta)) is Xbar which is the sum of all the (Y's /sum of all the individual Pbar's), fiven an answer of 2.987 for E(m(theta)).
Why is there a different answer? Hwy don’t we use tables formula? This sort of question has cropped up for me before and I've been wrong so wondering how I know which formula to use, as I though we could use formula in tables.
 
Given the data in the question, you can do it accurately using the method shown in the solution.

The formulae on page 30 of the Tables are only estimators, so if you were given less data in the question, that's what you'd have to use.
 
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