Hi, Just trying to refresh my memory of all the methods before the exam tomorrow. For assignment x3 question x3.7 c) translated gamma distribution, how do we know to work in 000s? I’ve just done this Q again and had the same problem as I remember having the first time, I don’t work in 000s & end up with a really small value of delta (0.001063206492) so applying the chi-squared formula just doesn’t work.
Take a look at page 17 of the Tables, which says j=1,2,3,... . Since Question X3.7 gives you claims sizes of 500, 1000 and 2000, you need to work in units of 500 so as to transform your claims into values 1, 2 and 4.