In the question, it is stated that the individual claim sizes follow a lognormal distribution with mean 3.615 and standard deviation 1.407. Doesn't this mean that µs = 3.615 and σs =1.407? (although the numbers seem very small for the mean and variance of claim sizes) According to the given answer, it seems that 3.615 and 1.407 are treated as the parameters of the lognormal distribution instead of the mean of the distribution. Please advise. Thank you.
To me it reads that you have to find the parameters, which is a standard trick question. It also makes sense given the mean comes out to be almost exactly 100.
Please see corrections document... http://www.acted.co.uk/Docs/2012/Corrections/ST8%20Corrections%202012.pdf
