Please explain me how to calculate the exact value of these question: (a ) use a normal approximation to find an approximate value for the probability that an observation from a Gamma(25,50) random variable falls between .4 and .8 . (b) The probability of any given policy in a portfolio of term assurance policies lapsing before it expires is considered to be .15. For a group of 100 such policies , find the approximate probability that more than 20 will lapse before they expire .
Neetu I don't want to be rude - but the solution in the notes is very clear - there is nothing there that is unusual in this question. This is a very basic CT3 question which follows directly on from the notes (section 2.3 normal approximation to the gamma distribution). This is describing a binomial distribution as each policy is a Bernoulli trial. It's then just a straight-down-the-line application of the normal approximation. Again this is a very basic CT3 question that follows on directly from the notes - section 2.1 (normal approximation to the binomial) and section 3 (continuity correction). If you are struggling on the statistics it would be worth purchasing the StatsPack which goes through the basic concepts CT3 at a much slower pace. Details can be found on our website here.
Sir in the solution gives explaintion of approximate value , It is clear but I want exact value. In this solution there is no explaintion for exact value . Gives only answer.
I don't think it is necessary to know how to calculate the exact value. In a lot of the cases, it's too complicated to do that, so we just settle for looking up the tables + finding the approximate value.
