In i), the MLE for p\hat is p = x/(3.25n) In iii), n=200 and the following data is given: no of claims 0 1 2 >2 observed freq 123 58 13 6 and the complete question for iii) is: A statistician proposes that the parameter p can be estimated by p\hat = 58/200 since p is the probability that a randomly chosen policy leads to one claim per year. Estimate the parameter p using the estimator derived in part (i). In its solution, n=200 and x=(123+58+13) = 194 is substituted despite mentioning one claim per year. I found this confusing. So,could anyone please help me clear this part? thank you
The statistician has made a mistake - that's why you are asked to calculate the actual value in part (iii) and then comment on why the statistician's answer is different in part (iv)
Hello This is because X is defined as the number of policies with up to 2 claims (as per the paragraph preceding part (i)). Hope this helps! Andy
