Queries April 2005 Qn 2

[vikky]

April 05 Qn 2
The examiners report doesn't give any further detail as to how they derive the 5 in 6 chance for 70 m sales and 10 in 11 chance for 60 m sales for option B.I guess this is the part which answers how likely it is to produce profits after all costs are taken into account

Secondly there is a requirement of how likely option A is to produce the higher profit.
I couldn't find any such point highlighted in the slides.
Secondly am also not sure how this is calculated given Sales are normally distributed.
Apologies, Ct 3 is very rusty hence the query.

 

[iActuary]

April 05 Qn 2
The examiners report doesn't give any further detail as to how they derive the 5 in 6 chance for 70 m sales and 10 in 11 chance for 60 m sales for option B.I guess this is the part which answers how likely it is to produce profits after all costs are taken into account

Secondly there is a requirement of how likely option A is to produce the higher profit.
I couldn't find any such point highlighted in the slides.
Secondly am also not sure how this is calculated given Sales are normally distributed.
Apologies, Ct 3 is very rusty hence the query.

The 5 in 6 and 10 in 11 chances are interpolated using the normal table in the question. They are not exact but close to the actual probability.

And there is a 1 in 4 chance that option A will be more profitable than option B. It was mentioned in the last slide before summary.

 

[David Wilmot]

April 05 Qn 2
The examiners report doesn't give any further detail as to how they derive the 5 in 6 chance for 70 m sales and 10 in 11 chance for 60 m sales for option B.I guess this is the part which answers how likely it is to produce profits after all costs are taken into account

Secondly there is a requirement of how likely option A is to produce the higher profit.
I couldn't find any such point highlighted in the slides.
Secondly am also not sure how this is calculated given Sales are normally distributed.
Apologies, Ct 3 is very rusty hence the query.

Please see attached which I think provides the detail you need Vikky.